OMA GOES ELECTRIC
Fellow Nordic issuer OMA SAVINGS BANK has
joined the covered bond pipeline,
mandating LBBW, Nordea and SEB ahead of a
euro sub-benchmark issue.
The Finish lender is eschewing a
traditional roadshow and instead will hold a
series of “electronic” investor meetings on
Monday and Tuesday, comprising phone
and video conference calls.
A banker close to the deal said they were
taking this approach because investors might
lNDûITûDIFlCULTûTOûCOMMITûTOûPHYSICALûMEETINGSû
in the circumstances and electronic meetings
would make it easier for accounts to engage.HIGH-YIELD
UNITED STATES
CLEVELAND-CLIFFS DEFIES SENTIMENT
TO PRICE JUNK BONDIron ore pellet producer CLEVELAND-CLIFFS
DElEDûTHEûSEVEREûMARKETûSELL
OFFûTOûPRICEû
new debt on Monday, but tweaked the size,
structure and pricing of the deal in response
as investors shied away from the riskier
portion of the deal.
The company had been marketing a
US$950m two-part deal the previous week,
ahead of its planned merger with AK Steel
on March 13.
But with investors skittish on riskier
ASSETSûINûAûVOLATILEûMARKET ûTHEûlRMûDROPPEDû
a planned US$400m unsecured note and
priced a US$725m six-year non-call two
secured tranche, rated Ba3/BB.
h%VENûWITHOUTûTHEûMARKETûACTIONû;LAST=û
WEEK ûITûWOULDûHAVEûBEENûDIFlCULT vûSAIDûONEû
bond investor about the unsecured portion.
“There are a lot of pro forma adjustments
and a lot has to go right for the sub piece to
make sense.”
Cleveland-Cliffs shortened the tenor on
the secured notes from an initial 8NC3 to a
6NC2. It set the coupon at 6.75%, pricing at a
discount of 98.783 to yield 7%.
That was wide of the 6.5% area whispers
seen on the initial eight-year tranche, and at
the tight end of 7%–7.25% talk for the
revised six-year structure.
The tranche was upsized from an initial
US$550m.
The company also trimmed the lien
basket from US$1.5bn to US$1.1bn, limiting
the amount of additional secured debt that
could be layered in.
The unsecured guaranteed tranche was
heard at the 9.5% area last week, wide of the
MID
ûAREAûINITIALLYûmOATEDPrice talk had already started off 120bp
wide to existing Cliffs notes, CreditSights
said on February 28, but the company’s
bonds suffered amid a widespread market
sell-off during that week due to fears over
the impact of the coronavirus on the global
economy.
û4HEûlRMSû"" ûRATEDûûû
unsecured notes fell from 93 on February 24
to 84 on March 2. Its 4.875% 2024 senior
secured was trading at 95.75, having
changed hands at par the week before.LEVERING UP
Cleveland-Cliffs’ planned merger with steel
producer AK Steel, one of its biggest
customers, is expected to close on March 13,
with a shareholder vote planned for March
10.
0ROCEEDSûFROMûTHEûNEWûDEBTûWILLûRElNANCEû
some of AK Steel’s outstanding debt.
Credit Suisse led the bond sale, having
PROVIDEDû#LIFFSûWITHûAû53BNûlNANCINGû
COMMITMENTûTOûBACKSTOPûTHEûRElNANCINGû
effort.
S&P has downgraded Cleveland-Cliffs to B
from B+, based on the increase in leverage
that the merger will cause.
It expects leverage to remain at 5x–6x
over the next year after the acquisition.#LIFFSûSAIDûINûAûlLINGûONû&EBRUARYûûTHATû
its near-term leverage target of 3x or below
would be achievable by the end of 2021.
It also told investors that after the
completion of its Toledo hot-briquetted iron
production plant, debt repayment would be
its priority.
4HEûlRMûWASûCOMMITTEDûTOûNOTû
repurchasing shares or increasing dividends
until its near-term leverage target is
achieved, it said.UNITI BONDS TRADE UP AFTER
SETTLEMENT WITH WINDSTREAMUNITI‘s bonds rallied on March 2, following
NEWSûTHATûTHEûTELECOMSûINFRASTRUCTUREûlRMû
had settled its legal battle with former
parent company WINDSTREAM.
Under the agreement, Uniti will fund
53BNûINûCAPITALûIMPROVEMENTSûINûlBREû
assets used by Windstream over the next 10
years.
It will also pay up to US$490m in cash
consideration, US$285m for the purchase of
UNUSEDûANDûUNDERUTILISEDûlBREûASSETSûANDû
US$244.5 from the sale of stock to certain
Windstream creditors.
The settlement will prevent a trial over a
15-year lease agreement between the twoInternational Financing Review March 7 2020 37BONDS HIGH-YIELDALL US$ DENOMINATED HIGH-YIELD BONDS
BOOKRUNNERS – 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Including US domestics, Euro, foreign, globals. Excluding equity-related debt.
Source: Refinitiv SDC code: B51 JP Morgan 57 7,636.77 8.9
2 BofA 51 7,570.16 8.8
3 Barclays 45 6,555.97 7.6
4 Citigroup 48 5,970.55 7.0
5 Credit Suisse 39 4,952.15 5.8
6 Goldman Sachs 40 4,760.43 5.5
7 Morgan Stanley 27 4,657.61 5.4
8 Deutsche Bank 40 4,326.31 5.0
9 Wells Fargo 31 3,937.63 4.6
10 RBC 28 3,838.20 4.5
Total 127 85,865.76ALL NON-DOLLAR DENOMINATED HIGH-YIELD BONDS
1/1/2020 TO DATE
Managing No of Total Share
bank or group issues €(m) (%)Excluding equity-related debt.
Source: Refinitiv SDC code: B61 JP Morgan 16 1,891.28 9.5
2 Deutsche Bank 11 1,601.70 8.1
3 Citigroup 13 1,335.14 6.7
4 BNP Paribas 12 1,139.86 5.7
5 ING 10 1,110.34 5.6
6 Barclays 10 1,072.80 5.4
7 HSBC 13 1,019.70 5.1
8 Credit Agricole 7 994.41 5.0
9 Credit Suisse 7 978.24 4.9
10 UniCredit 9 904.62 4.5
Total 37 19,889.64ALL EUROPEAN HIGH-YIELD ISSUERS
1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Excluding equity-related debt.
Source: Refinitiv SDC code: B06c1 JP Morgan 18 2,370.52 9.4
2 Citigroup 15 2,114.32 8.4
3 Deutsche Bank 10 2,038.77 8.1
4 BNP Paribas 12 1,535.83 6.1
5 ING 9 1,326.58 5.3
6 Credit Suisse 7 1,277.19 5.1
7 Credit Agricole 6 1,203.41 4.8
8 Barclays 8 1,183.53 4.7
9 SG 7 1,125.88 4.5
10 HSBC 12 1,124.68 4.5
Total 39 25,194.42ALL ASIAN HIGH-YIELD ISSUERS
1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Excluding equity-related debt.
Source: Refinitiv SDC code: B06d1 Credit Suisse 18 2,362.97 12.0
2 UBS 12 1,672.49 8.5
3 BofA 5 1,531.66 7.7
4 Tianfeng Securities 3 1,300.00 6.6
5 Goldman Sachs 9 1,144.82 5.8
6 Haitong Secs 23 902.82 4.6
7 Citic 15 883.49 4.5
8 Barclays 12 699.85 3.5
9 Standard Chartered 7 677.20 3.4
10 Morgan Stanley 7 627.50 3.2
Total 41 19,767.556 IFR Bonds 2323 p 25 - 53 .indd 37 06 / 03 / 2020 19 : 18 : 07