Published on 5/26/2016 in the Prospect News High Yield Daily.
New Issue: Teck Resources prices $1.25 billion upsized senior notes in two parts
By Paul A. Harris
Portland, Ore., May 26 – Teck Resources Ltd. priced an upsized $1.25 billion amount of senior notes (B1/BB-) in two tranches on Thursday, according to a market source.
The deal included $650 million of five-year notes which priced at par to yield 8%. The yield printed 25 basis points beneath the tight end of the 8¼% to 8½% yield talk.
In addition the company priced $600 million of eight-year notes at par to yield 8½%. The yield came on top of talk that had the longer-maturity notes coming 50 basis points behind the five-year notes.
The total issue size was increased from $1 billion.
J.P. Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co., Barclays, BMO Securities, CIBC World Markets, Citigroup Global Markets, Deutsche Bank Securities Inc., Morgan Stanley & Co., RBC Capital Markets, Scotia Capital and TD Securities were the joint bookrunners.
The Vancouver, B.C.-based developer and miner of steelmaking coal and zinc plans to use the proceeds to fund tender offers for up to $1 billon of its 3.15% notes due 2017, 3.85% notes due 2017, 2½% notes due 2018 and 3% notes due 2019, with any remaining proceeds to be used for general corporate purposes.
| Issuer: | Teck Resources Ltd.
|
| Amount: | $1.25 billion, increased from $ billion
|
| Securities: | Senior notes
|
| Bookrunners: | JP Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co., Barclays, BMO Securities, CIBC World Markets, Citigroup Global Markets, Deutsche Bank Securities Inc., Morgan Stanley & Co., RBC Capital Markets, Scotia Capital, TD Securities
|
| Trade date: | May 26
|
| Settlement date: | June 7
|
| Ratings: | Moody’s: B1
|
| Standard & Poor’s: BB-
|
| Distribution: | Rule 144A for life
|
| Marketing: | Roadshow
|
|
|
| Five-year notes
|
| Amount: | $650 million
|
| Maturity: | June 1, 2021
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Spread: | 663 bps
|
| First call: | June 1, 2018 at 104
|
| Price talk: | 8¼% to 8½%
|
|
|
| Eight-year notes
|
| Amount: | $600 million
|
| Maturity: | June 1, 2024
|
| Coupon: | 8½%
|
| Price: | Par
|
| Yield: | 8½%
|
| Spread: | 678 bps
|
| First call: | June 1, 2019 at 106.375
|
| Price talk: | 50 bps behind the five-year notes
|
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