Germany's TUI talks €1 billion three-part note offering

By Paul A. Harris

St. Louis, Nov. 29 - TUI AG issued price talk Tuesday on its approximately €1 billion of high-yield securities in three tranches, according to market sources.

Talk on two tranches comprising about €700 million of senior notes (Ba2/BB) to be sold via Rule 144A and Regulation S, is as follows: the five-year floating-rate notes are talked at Euribor plus 160 to 170 basis points, and the seven-year fixed-rate notes are talked at a spread to mid-swaps of 187.5 to 200 bps.

Meanwhile TUI's proposed €300 million of cumulative perpetual preferred securities (B1/B+), which will be sold in a Regulation S transaction, are talked at the 8¾% area.

Pricing is expected late this week.

Citigroup, Deutsche Bank Securities, HVB and The Royal Bank of Scotland are leading the bond offerings.

Proceeds from the senior notes and preferred securities will be used to refinance debt incurred in the acquisition of CP Ships, to purchase CP Ships shares and to refinance CP Ships and TUI debt.

TUI is a Hanover, Germany-based tourism company.

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