There may be an opportunity to tap the
green bond for US$75m, said Steinsland.ALTICE CLEARS UP LUXEMBOURG DEBT
STACK WITH EXCHANGE OFFERALTICE saw an almost 100% take-up for its
exchange offer, despite the terms being
seen as unattractive by analysts.
The exchange offer, along with a €2.1bn-
EQUIVALENTûTHREE
PARTûRElNANCINGûTRADEûINû
January, aimed to clear up the debt at
Altice Luxembourg - a long-stated aim for
the company.
The company wanted to exchange its
Altice Luxembourg May 2027 unsecured
notes into equivalent notes at a subsidiary
of Altice France.
It managed to get a take-up of 97.63% on
its US$1.6bn US dollar 10.5% senior notes
due 2027 and 94.1% on its €1.4bn euro 8%
senior notes due 2027s.
The minimum tender condition for both
notes was 50%.
Investors were switched into notes with
the same coupon, call protection and
tenor, but under subsidiary Ypso Finance
BIS. Bondholders who did not participate
in the exchange offer were redeemed at
101.
However, CreditSights analysts said the
new bonds were less attractive to
bondholders because of “the loss of the
restricted payments language, loss of
DIVERSIlCATIONûINûCOLLATERALûANDûPOTENTIALû
tax implications”, versus the Altice
Luxembourg notes.
CreditSights had initially encouraged
bondholders to pass on the exchange. But
after no bondholder group came together,
the research group updated its view,
telling investors to participate in the offer.
“While this exchange is unattractive for
holders of the ATCNA 2027S, it is certainly
not so negative that we see downside as
worse than a 101 redemption, in the
situation where investors pass but Altice
still gets over 50% participation,” analysts
wrote.ASIA-PACIFIC
AVANTI PULLS KANGAROO DEBUTNew Zealand consumer lender AVANTI
FINANCE, rated BB (S&P), has pulled a
planned no-grow A$25m (US$16.5m) four-
YEARûlXED
RATEûDEBUTû+ANGAROOûISSUEûVIAû
sole lead manager NAB because of “market
volatility”.
The sub-investment grade note offering,
which was being marketed with an
indicative coupon and yield of 5.0%–5.25%,
was expected to be priced last Friday.AUSSIE CORPORATES TEST
NON-IG MARKET
FRASERS PROPERTY AUSTRALIA and mining
services group PERENTI GLOBAL are preparing
to test Australia’s non-investment-grade
bond market with proposed debut offerings
in the coming weeks.
Unrated or high-yield issuance was almost
unheard of in Australia’s famously
conservative institutional arena a few years
ago, when most asset managers were
mandated to hold only credits rated at least
Triple B or even Single A.
4HINGSûHAVEûCHANGED ûHOWEVER ûASûlXED
income funds adapt to rapidly rising client
appetite for yield in a low-interest-rate
world.
On the sellside, there is an obvious
incentive for issuers to diversify beyond
bank loans and the deep, but expensive,
offshore bond markets.
Recruitment platform SEEK was the last
unrated issuer to access the market, with a
A$150m (US$96m) 6.5-year non-call 3.5-year
note offering last December, priced at three-
month BBSW plus 370bp.
SEEK’s second trade, following a debut
!MûlVE
YEARûmOATING
RATEûNOTEûISSUEûINû
April 2017, came hot on the heels of an
inaugural A$300m six-year FRN offering
from David Jones, a subsidiary of South
African retailer Woolworths.
Meanwhile, Single B rated Virgin
Australia has tapped this new source of
demand twice over the last couple of years
WITHû!MûANDû!MûOFûlVE
YEARûNON
call three notes in May 2018 and February
ûWHICHûPAYûJUICYûCOUPONSûOFûûANDû
8.075%, respectively.SUSTAINABLE CARROT
Frasers Property Australia has mandated
ANZ, Barclays, HSBC, NAB and OCBC Bank for
an unrated long-dated sustainability MTN
issue under its A$2bn multi-currency EMTN
programme, which is guaranteed by
Singapore-listed parent Frasers Property and
may price as early as this week.
One Sydney-based fund manager, who has
some small limits for sub-investment-grade
bonds, is considering a potential purchase of
the FPA bonds.
“Frasers said its credit metrics fall into
Triple B territory, which, if we can verify
this, would obviously provide comfort,
while we are generally favourable on the
LOCALûDIVERSIlEDû2%)4ûSECTOR vûHEûSAID
He added that the bond’s sustainable use-
of-proceeds structure offers extra appeal
given the growth in green-targeted investor
INmOWS
&0!ûRECENTLYûSETûUPûAûSUSTAINABLEûlNANCEû
framework based on the Global Real Estate
Sustainability Benchmark, which wasestablished by a group of global pension
funds as an ESG measure for their
investments.
4HEû&0!ûFRAMEWORKûISûTHEûlRSTûOFûITSûKINDû
for sustainability-linked bonds and loans in
!SIA
0ACIlCûFROMûAûREALûESTATEûCOMPANY û
according to Frasers Property. The company
has been taking green loans since
3EPTEMBERû ûINCLUDINGûAû!MûlVE
year green facility for FPA last April.
FPA aims to achieve 5-Star Green Star
ratings for its new developments and at least
a 4-Star GRESB rating for its portfolio. It also
plans to be carbon-neutral in development
and operation by 2028.MINING SERVICES
Outside the green segment, Perenti (formerly
Ausdrill), an Australian headquartered ASX-
LISTEDûDIVERSIlEDûGLOBALûMININGûSERVICESû
group, rated Ba2/BB– (Moody’s/S&P), has
mandated NAB and HSBC for a potential debut
Australian dollar MTN offering.
Last year, Perenti acquired Australian
contract miner Barminco, which has an
outstanding US$350m senior secured 6.625%
May 15 2022 144A/Reg S bond issue, rated
Ba3/BB (Moody’s/S&P), that is expected to be
called on March 27 this year.
Ausdrill last May called off plans for a US
dollar bond offering, citing weak market
conditions.STRUCTURED FINANCE
EMEA MBS
TWO 2019 BTL DEBUTANTS ANNOUNCE
RETURN TO MARKETTwo new buy-to-let trades, one from the UK
ANDûTHEûOTHERûFROMûTHEûRARERûJURISDICTIONûOFû
the Netherlands, were announced on
Thursday.
Dutch non-bank lender DOMIVEST
mandated leads for DOMI 2020-1, its second
BTL securitisation, backed by performing
mortgages to professional landlords.
Unlike the specialist BTL product in the
UK, which is based on debt service coverage
ratios generated by expected rental returns,
Dutch BTL is harder to distinguish from
regular owner-occupied mortgage
origination.
The Dutch product is based on borrower
income and lending is still dominated by the
High Street banks. But Domivest is one of
the exceptions – its main shareholder is
Cervus Capital Partners, run by ABS
specialists from Faxtor, a pre-crisis investor
and one-time CDO of ABS issuer.International Financing Review February 29 2020 37BONDS HIGH-YIELD6 IFR Bonds 2322 p 25 - 43 .indd 37 28 / 02 / 2020 19 : 15 : 32