MultiPlan Offers Debt in Busiest July Since at Least ‘98: New Issue Alert
MultiPlan Inc., the health-carecost-management company being acquired by BC Partners ltd. andSilver Lake, is marketing debt in the busiest July for corporatebond sales since at least 1998.
MultiPlan may sell $650 million to $675 million of bonds topay for the acquisition, according to a person familiar with thetransaction. it may also get $1.375 billion of loans, said theperson, who declined to be identified because terms aren’t set.
Sales of corporate bonds have jumped to $84.6 billion thismonth, surpassing the previous July record of $71.1 billion setlast year, according to data compiled by Bloomberg, which goesback to 1999. Companies are selling debt as they take advantageof low yields and because of “positive momentum” from better-than-expected earnings, said Rajeev Sharma, a money manager atFirst Investors Management in new York.
“It is definitely busy, compared to past Julys,” saidSharma, who oversees $1.4 billion of investment-grade credit.“Rates are so low that it makes sense for companies to comeout. The anticipation is that eventually, rates will increase,and you might as well get in there now and shore up yourliquidity a little bit and do whatever you want with the cashlater on.”
UBS AG, the largest Swiss lender by assets, led $5.28billion of U.S. bond sales yesterday, Bloomberg data show. Thebank sold $2.5 billion of 4.875 percent 10-year bonds a dayafter reporting quarterly profit that beat analysts’ estimateson higher-than-expected trading revenue, the data show.
The extra yield investors demand to own investment-gradecorporate debt fell was unchanged at 187 basis points asabsolute yields fell 6 basis points to 4.10 percent, accordingto Bank of America Merrill Lynch’s Corporate Master index. Abasis point is 0.01 percentage point.
Ford Motor Co., last year’s biggest issuer of high-yield,high-risk corporate debt, led junk sales yesterday as itsfinance arm offered $1.25 billion of 6.625 percent, 7-yearnotes. High-yield, high-risk bonds are rated below Baa3 byMoody’s Investors Service and BBB- by Standard & Poor’s.
Investors are snapping up new issues as yields in thesecondary market remain low, Sharma said. “Everybody wants apiece of the new issuance,” he said. “You can’t really gethuge yield pick-up in the secondary market.”
Spreads on junk debt widened 4 basis points to 647 basispoints, according to the Bank of America Merrill Lynch U.S. HighYield Master II Index. Yields on the debt fell 2 basis points to8.52 percent, the index data show.
BC Partners and Silver Lake said on July 9 they had agreedto buy MultiPlan from Carlyle Group and Welsh, Carson, Anderson& Stowe. Following the announcement, Moody’s said the company’scorporate family rating remains unchanged at B2.
S&P said July 12 that it would act within 30 days on itsMultiPlan ratings, including the senior secured debt grade ofB+.
Corporate bond sales of $17.05 billion through yesterdaycompare with $16.6 billion through the first three days of lastweek, Bloomberg data show.
Following is a description of at least $6.9 billion ofpending sales of dollar-denominated bonds in the U.S.
CREDIT SUISSE GROUP AG, Switzerland’s second-largest bank,is selling $1.5 billion of Tier 1 bonds, according to two peoplewith knowledge of the sale. The notes, callable after fiveyears, will carry a coupon of 7.875 percent, said the people,who declined to be identified because terms aren’t set. CreditSuisse is managing the sale of the bonds, which will be issuedthrough Claudius ltd, the people said.
DOHA BANK QSC, Qatar’s third-largest bank, may raise asmuch as $1 billion from bond sales, its chief executive officersaid. The money is likely to be raised for five years and ismeant to “fix the maturity mismatch” on the bank’s balancesheet, Raghavan Seetharaman said in a June 16 telephoneinterview from Doha. The bank will sell the bonds by the end ofthis year in both dollars and the local riyal currency, the CEOsaid in a July 25 interview. The lender said in April that itplanned to sell senior notes in dollars in a statement on theQatari bourse, without disclosing the size of the offering.
CHILE hired JPMorgan Chase & Co, Citigroup Inc. and HSBCHoldings Plc to arrange the country’s first international bondsale in six years, Finance Minister Felipe Larrain said. Chilewill use proceeds of the 10-year bonds to help financerebuilding after a February earthquake, Larrain said. Thegovernment plans to sell $1 billion of the securities in dollarsand $500 million “denominated in pesos,” Larrain said. Moody’supgraded Chile to Aa3 from A1 on June 16, citing “economic andfinancial resilience even in the face of major adverse shocks,including February’s historic earthquake.” S&P graded theproposed notes A+.
FORETHOUGHT FINANCIAL GROUP INC. plans to sell $150 millionof 10-year bonds, according to a person familiar with thetransaction, who declined to be identified because terms aren’tset. S&P assigned the notes a grade of BBB- in a March 24report.
BANCO BMG S.a., a Brazilian lender specializing in loans tostate retirees and workers, plans to sell 10-year bonds indollars, according to a person familiar with the offering. Thenotes may yield about 9 percent, said the person, who declinedto be identified because terms aren’t set. The Belo Horizonte-based bank hired Banco Bradesco SA, BCP Securities, MorganStanley and Banco Santander SA to arrange the sale, the personsaid.
STERICYCLE INC. plans to issue $175 million of 7-year, 3.89percent notes and $225 million of 10-year, 4.47 percent debtafter receiving commitments from 22 institutional investors tobuy the securities, it said in a statement distributed byBusiness Wire.
The PROVINCE OF CORDOBA, Argentina, plans to sell as muchas $350 million of bonds in international markets once thefederal government completes a restructuring of defaulted debt,Banco de Cordoba said. The province hired Citigroup Inc. and UBSAG to arrange an overseas dollar bond sale, said a personfamiliar with the transaction who declined to be identifiedbecause terms aren’t set.
ENERGYSOLUTIONS INC., the Salt Lake City-based nuclearservices company, plans to sell $300 million of senior unsecurednotes due 2018, the company said a July 28 statement distributedby Marketwire. The company has amended its credit facilities andplans to refinance them with borrowings under new loans and theoffering of senior notes, the company said in a July 13statement. Standard & Poor’s assigned the proposed debt a ratingof BB- on July 15.
BANCO PANAMERICANO SA, the lender controlled by mediamagnate Silvio Santos, plans to sell $300 million of five-yeardollar bonds, according to a person familiar with thetransaction. The Sao Paulo-based bank hired Banco Bradesco SA,Itau Unibanco Holding SA, Standard Bank Group ltd. and UBS AG toarrange the sale of senior unsecured notes, said the person, whodeclined to be identified because terms aren’t set. Moody’srates the notes Ba2, it said in a report.
MULTIPLAN INC. may sell $650 million to $675 million ofbonds to help pay for its acquisition by BC Partners ltd. andSilver Lake, according to a person familiar with thetransaction. The health-care cost management company also seeksa $1.3 billion term loan and a $75 million revolving line ofcredit, said the person, who declined to be identified becauseterms aren’t set.
FERRO CORP. plans to sell $250 million of senior notes asit seeks to repurchase outstanding convertible debt due in 2013.The company also is negotiating with lenders to enter into a newcredit facility, according to a statement distributed byBusiness Wire.
KCA DEUTAG DRILLING GROUP LTD., a unit of private-equityinvestor First Reserve Corp., is planning to sell $500 millionof eight-year bonds through Turbo Beta Plc, according to AlexChristou, an Aberdeen, Scotland-based spokesman for the oil-services company. Goldman Sachs Group Inc. is managing the salewith HSBC Holdings Plc, Lloyds TSB Banking Group Plc, Royal Bankof Scotland Group Plc and Natixis, a person with knowledge ofthe transaction said. The notes may be rated CCC by S&P and Caa2by Moody’s, according to a statement on the company’s website.
MARINA DISTRICT FINANCE COMPANY INC., owner of the BorgataHotel Casino & Spa in Atlantic City, plans to sell $725 millionof senior secured debt in two parts, according to a personfamiliar with the transaction. The notes will be due in 2015 and2018, said the person, who declined to be identified becauseterms aren’t set. Marina District Finance is Boyd Gaming Corp.’sjoint venture with MGM Resorts International. Proceeds will beused to repay bank debt and fund a dividend, the person said.
TRILOGY INTERNATIONAL PARTNERS LLC, the wirelesscommunications provider, plans to sell $370 million of seniorsecured notes, according to Moody’s Investors Service. Moody’srated the notes Caa1, it said in a report. Proceeds will be usedto refinance debt and finance growth in new Zealand, Moody’ssaid. S&P rated the debt an equivalent CCC+. The notes will havea maturity of six years, according to a person familiar with thetransaction, who declined to be identified because terms aren’tset.
UNIVERSAL HEALTH SERVICES INC., the operator of more than100 U.S. medical facilities that’s buying Psychiatric SolutionsInc., cut its offering of senior unsecured notes to $250million, according to a person familiar with the transaction. Itincreased the size of the term loans it’s seeking by $100million, said the person, who declined to be identified becauseterms aren’t set. The King of Prussia, Pennsylvania-basedcompany previously planned to issue $400 million of seniorunsecured debt to help finance the acquisition, according to afiling with the Securities and Exchange Commission.
E-LAND FASHION CHINA HOLDINGS LTD, the Hong Kong-basedapparel products provider, hired Morgan Stanley to help it sell$200 million of three-year bonds, according to a person familiarwith the matter. The company plans to begin meeting withinvestors in Asia, Europe and the U.S. on July 19, said theperson who declined to be identified because terms aren’t set.Moody’s Investors Service assigned the proposed notes a Ba2,citing growing personal consumption in China, E-Land Fashion’smoderate scale and significant business volatility. Proceedswill be used for mainly for capital expenditures and generalcorporate purposes, Moody’s said in the report.
GENTIVA HEALTH SERVICES INC., the U.S. home-nursingcompany that is buying Odyssey HealthCare Inc., plans to sell$305 million of eight-year notes, the Atlanta-based company saidin a may 24 regulatory filing, without specifying the timing ofthe transaction. Proceeds will be used to help fund thetakeover, according to the filing. Standard & Poor’s assignedthe unsecured notes a B- credit rating on June 29. Moody’sInvestors Service rated the notes a grade of B2 and ranked $925million of loans three steps higher at Ba2, it said in a report.
Offerings in Pipeline
NATIONAL BANK OF EGYPT, the country’s largest lender, plansto sell its first international bonds and is meeting with fixed-income investors, according to three people familiar with theplan. The Cairo-based bank may offer a benchmark-sized issue,said a banker, who declined to be identified because termsaren’t set. The lender received approval from Egypt’s centralbank to sell as much as $1.5 billion of bonds and is meetingwith investors in Asia, London, Germany, the Middle East, andEastern Europe, said a bank official, who declined to beidentified. Benchmark issues are typically for at least $500million.
IDBI BANK LTD., an Indian state-owned lender, isconsidering a sale of bonds denominated in U.S. dollars to raiseabout $500 million, Executive Director Melwyn Rego said in aninterview on July 21. HSBC Holdings Plc and Barclays Plc havebeen hired to oversee the bank’s medium-term note program, Regosaid. BNP Paribas SA, Royal Bank of Scotland Group Plc andStandard Chartered Plc will help manage this sale of benchmarknotes, to be done through its Dubai branch, he said. The bondsmay have a maturity of five to five-and-a-half years, said Rego.
CZECH REPUBLIC plans to sell as much as $2 billion ofdollar bonds to diversify from koruna and euro debt, Eduard Janota, former finance minister, said in an interview for MladaFronta Dnes newspaper.
POTASH CORPORATION OF SASKATCHEWAN INC., the world’slargest fertilizer company by capacity, filed a registrationstatement with the U.S. Securities and Exchange Commission for$2 billion of debt securities.
INDONESIA plans to name three banks to help it sellapproximately $650 million of Islamic bonds in October, DahlanSiamat, director for Islamic financing at the finance ministry,said in a telephone interview in Jakarta. The government soldits first international Islamic dollar bonds in April 2009.
OAO GAZPROMBANK, the lending unit of Russia’s gas exportmonopoly, hired Barclays Capital, Royal Bank of Scotland GroupPlc, and UBS AG to organize meetings with investors in Europeand Asia starting July 5, according to two people with knowledgeof the transaction.
CORPORACION FINANCIERA DE DESAROLLO SA Peru’s statedevelopment bank known as Cofide, plans to sell as much as $250million of dollar-denominated bonds, according to ChiefFinancial Officer Carlos Linares. Linares said in an interviewin Lima, that the lender is selling long-term debt as it boostslending to local infrastructure projects. “Peru’s need forinfrastructure is huge,” Linares said. “The government istrying to promote foreign investment in a long list ofprojects.”
SRI LANKA plans to sell dollar-denominated bonds, accordingto its central bank. The South Asian country’s third-everoverseas offering is likely after August, Central Bank of SriLanka Assistant Governor C.J.P. Siriwardena said in a telephoneinterview on June 30.
JORDAN plans to sell about $500 million of bonds, FinanceMinister Mohammad Abu Hammour said in an interview on June 23.The sale will be denominated in U.S. dollars “as it’s a stablecurrency and the Jordanian dinar is pegged to it,” Abu Hammoursaid.
URUGUAY may sell as much as $1 billion of bonds in 2011,including $500 million of dollar-denominated debt, Carlos Steneri, director of public credit at Uruguay’s Ministry ofEconomy and Finance, said June 3 at a LatinFinance conference inLondon. The dollar-denominated bonds may have a maturity of 20years or more, Steneri said.
MALAYSIA plans to raise about $1 billion from its firstsale of conventional dollar bonds in eight years after drawingbids for five times the Islamic debt it offered, a financeministry official said. The government may hire the same banks,including CIMB Group Holdings Bhd. and HSBC Holdings Plc, toarrange the sale by Sept. 30, said the official, who declined tobe named as the discussions are private. Malaysia raised $1.25billion from a Shariah-compliant dollar bond on may 27. Malaysiais rated A3 by Moody’s and A- by S&P.
SABIC CAPITAL, a unit of Saudi Basic Industries Corp., willsell bonds when market conditions and rates are favorable, itsvice president for corporate finance Mutlaq al-Morished told al-Arabiya television in Dubai on June 16. Sabic delayed a bondsale because of unfavorable spreads, al-Morished said in a May26 telephone interview. Sabic Capital had hired HSBC HoldingsPlc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plcto manage a benchmark-sized offering.
GHANA is considering selling its second dollar bond in 2011to tap investor demand as the start-up of oil production boostseconomic growth and narrows the budget deficit, Deputy FinanceMinister Fifi Kwetey said. The government is considering a “no-deal roadshow” as early as the fourth quarter to gaugeinternational investors’ appetite, Kwetey said in a may 26interview in Abidjan. Ghana sold its first global bond in 2007,raising $750 million to help fund the construction of roads andpower plants.
ANGOLA received credit ratings from Moody’s, S&P, and FitchRatings that put it on par with Nigeria, Lebanon and Belarus,and paved the way for a planned sale of international bonds. Thesouthern African nation’s creditworthiness was rated at B+ byS&P and Fitch, four levels below investment grade. Moody’sassigned an equivalent ranking of B1.
EURASIAN NATURAL RESOURCES CORP., a London-based iron oreand alumina producer with operations in China and Russia, saidit delayed its first dollar bond sale. The company is“postponing meetings with investors regarding a potential bondissuance under its Euro Medium Term Note program until furthernotice,” Charlotte Kirkham, a spokeswoman for ENRC, said in ane-mail. The company had hired Deutsche Bank AG and MorganStanley to manage the sale, according to a person familiar withthe transaction.
CHINA ORIENTAL GROUP CO. plans to sell senior notes toprovide working capital and possibly to finance the purchase ofsteel mills and iron ore assets in China. Deutsche Bank AG willmanage the sale with ING Groep NV, according to a statement tothe Hong Kong stock exchange.
BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM receivedapproval from the central bank to issue 7 trillion dong ($369million) of notes and another 3 trillion dong of dollar-denominated notes in 2010, according to a statement on StateBank of Vietnam’s Web site.
BOLIVIA plans its first international bond sale in morethan 70 years as early as the end of 2011, Finance Minister Luis Arce said. He didn’t disclose the size of the offering.
POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP. of thePhilippines may sell between $750 million and $1.5 billion ofdollar-denominated bonds “anytime” to help refinance maturingdebt, Vice Chairman Jose Ibazeta said. The company manages thefinances of state utility National Power Corp.
BRISBANE AIRPORT CORP., owner of Australia’s third-busiestairport, may sell bonds in the U.S. as it pursues new markets tohelp refinance debt and pay for a new runway. The company isconsidering a 10- or 15-year U.S. private placement and a five-to seven-year Australian dollar bond sale in late 2010 or early2011, Chief Financial Officer Tim Rothwell said in a phoneinterview from Brisbane.
VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP, the state-owned coal producer known as Vinacomin, plans to sell as much as$500 million of bonds overseas to fund mining and energyprojects, according to Deputy Chief Executive Officer Nguyen Van Hai.
FINLAND may sell five-year bonds denominated in dollars,the Finnish Treasury said in a document posted on its Web site.
MONGOLIA plans to raise $500 million selling bonds thisyear and the remainder of a planned $1.2 billion program will besold according to market conditions, Batbayar Balgan, directorgeneral of the financial and economic policy department ofMongolia, said at a forum in Ulan Bator on June 16. Thegovernment scaled back its plans for global bond sales afterEurope’s debt crisis drove up borrowing costs. Investment banksare advising Mongolia to issue debt with maturities of 5 to 10years, Bayartsogt said in a Feb. 9 interview. The securities mayyield 8 percent to 11 percent, he said.
To contact the reporter on this story:Sapna Maheshwari in new York at .
MultiPlan Offers Debt in Busiest July Since at Least ‘98: New Issue Alert
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