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Pernod Ricard to Issue Bonds for Absolut Refinancing (Update1)
March 10, 2010, 11:01 AM EST
By Sonja Cheung and Caroline Hyde
March 10 (Bloomberg) -- Pernod Ricard SA, the world’s second-biggest liquor maker, is planning to sell six-year bonds to help refinance loans used to buy the Absolut vodka brand in March 2008.
Paris-based Pernod has 1.7 billion euros ($2.3 billion) of loans due as early as next year, followed by a 6.1 billion-euro facility that must be repaid by 2013, according to data compiled by Bloomberg. Those deals helped finance the acquisition of Vin & Sprit AB, the maker of Absolut, from Sweden’s government.
The market for corporate bonds is re-opening after a month- long hiatus, with European companies selling 7 billion euros ($9.5 billion) of debt yesterday, the busiest day this year, Bloomberg data show. Pernod will be the first non-investment grade, or junk, issuer since concern Greece would be unable to pay its debt roiled credit markets.
“The high-yield bond market has been taking a breather recently, but investors still have cash to put to work, and will put some of that into the new Pernod bond,” said Robert Jaeger, a credit analyst at Societe Generale SA in London. “The name is well liked, and is really thought of as a crossover name.”
Spokeswoman Florence Taron in Paris declined to comment on the transaction.
The notes may be priced to yield 225 basis points to 230 basis points more than the mid-swap rate, people with knowledge of the deal said. A basis point is 0.01 percentage point.
Pernod was downgraded by one step to Ba1, or one level below investment grade, by Moody’s Investors Service in July 2008. It has an equivalent BB+ grading from Standard & Poor’s. Junk bonds are those rated below Baa3 by Moody’s and BBB- by S&P.
The company’s rating could be upgraded in the “intermediate term” as it seeks to pay back its debts, said Jean-Yves Coupin, a credit analyst in London at BNP Paribas. “It’s a solid high-yield name, and the bond will likely be priced to reflect that,” he said.
--With assistance from Andrew Cleary in London and Esteban Duarte. Editors: Paul Armstrong, Andrew Reierson
To contact the reporters on this story: Sonja Cheung in London [email protected]; Caroline Hyde in London [email protected]
To contact the editor responsible for this story: Paul Armstrong at [email protected]
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Pernod Ricard to Issue Bonds for Absolut Refinancing (Update1)
March 10, 2010, 11:01 AM EST
By Sonja Cheung and Caroline Hyde
March 10 (Bloomberg) -- Pernod Ricard SA, the world’s second-biggest liquor maker, is planning to sell six-year bonds to help refinance loans used to buy the Absolut vodka brand in March 2008.
Paris-based Pernod has 1.7 billion euros ($2.3 billion) of loans due as early as next year, followed by a 6.1 billion-euro facility that must be repaid by 2013, according to data compiled by Bloomberg. Those deals helped finance the acquisition of Vin & Sprit AB, the maker of Absolut, from Sweden’s government.
The market for corporate bonds is re-opening after a month- long hiatus, with European companies selling 7 billion euros ($9.5 billion) of debt yesterday, the busiest day this year, Bloomberg data show. Pernod will be the first non-investment grade, or junk, issuer since concern Greece would be unable to pay its debt roiled credit markets.
“The high-yield bond market has been taking a breather recently, but investors still have cash to put to work, and will put some of that into the new Pernod bond,” said Robert Jaeger, a credit analyst at Societe Generale SA in London. “The name is well liked, and is really thought of as a crossover name.”
Spokeswoman Florence Taron in Paris declined to comment on the transaction.
The notes may be priced to yield 225 basis points to 230 basis points more than the mid-swap rate, people with knowledge of the deal said. A basis point is 0.01 percentage point.
Pernod was downgraded by one step to Ba1, or one level below investment grade, by Moody’s Investors Service in July 2008. It has an equivalent BB+ grading from Standard & Poor’s. Junk bonds are those rated below Baa3 by Moody’s and BBB- by S&P.
The company’s rating could be upgraded in the “intermediate term” as it seeks to pay back its debts, said Jean-Yves Coupin, a credit analyst in London at BNP Paribas. “It’s a solid high-yield name, and the bond will likely be priced to reflect that,” he said.
--With assistance from Andrew Cleary in London and Esteban Duarte. Editors: Paul Armstrong, Andrew Reierson
To contact the reporters on this story: Sonja Cheung in London [email protected]; Caroline Hyde in London [email protected]
To contact the editor responsible for this story: Paul Armstrong at [email protected]
Related Articles
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invece mi piace questa telefonica
