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Bond Market News
StanChart Prices S$ AT1, Vedanta, CK Hutch, MGM, Genting NY Price $ Bonds
September 11, 2024
Standard Chartered (StanChart) raised S$750mn via a PerpNC5 AT1 bond at a yield of 5.30%, 40bp inside initial guidance of 5.70% area. The junior subordinated bonds are rated Ba1/BB-/BBB-, and received orders of over S$1.95bn, 2.6x issue size. Singapore took up 87% of the issuance. Looking at investor allocation, private banks took up 76%, followed by fund managers/insurers at 20% and banks/others taking up the remaining 4%. Coupons are fixed until the reset date of 19 March 2030, and if not called by then, resets to the 5Y SORA OIS plus 307.7bp. A conversion trigger event would occur if the CET1 Ratio is less than 7.00%, calculated on a consolidated and fully loaded basis. Net proceeds will be used for the general corporate purposes and to further strengthen its regulatory capital base.
Vedanta Resources raised $900mn via a 5NC2 bond at a yield of 10.875%, 25bp inside initial guidance of 11.125% area. The senior unsecured notes are rated B- by S&P. Vedanta Resources Finance II PLC is the issuer of the notes. Proceeds will be used first to refinance its $470mn 13.875% 2027s and then to refinance its $1.008b 13.875% 2028s. A conditional call notice has been issued for a time period of 30 days, together with the capped tender offer at par for these bonds. The early tender deadline is on September 16. The notes have the following covenants:
- Negative Lien on brand fee receivables, other than the charge already created
- Cap on Incurred Debt:
- For parent guarantors and subsidiaries, the Fixed Charge Coverage Ratio (FCCR) has to exceed, 1.75x until March 2025, 2x until March 2026, 2.25x until March 2027 and 2.5x thereafter.
- For subsidiary guarantors:
- Attributable debt-to-EBITDA cannot exceed 6x currently and 5.5x after 30 Sep 2025
- A debt cap of $4bn excluding intercompany loans (against a 40.99% stake held by subsidiary guarantors) or consolidated FCCR of parent guarantor and subsidiaries at 3.5x
- Restricted Payments: A builder basket at 50% of net income, which increases to 100% of net income, if consolidated FCCR>3.5x
- Other Covenants include a limitation of distribution of net proceeds from asset sales and a change of control (CoC) event
The bond is callable in the 3rd year at par plus 50% of coupon. The bond is callable in 4th year at par plus 25% of coupon. The bond is callable in 5th year at par.
CK Hutchinson raised $1bn via a two-part deal. It raised $500mn via a 5.5Y bond at a yield of 4.4%, 30bp inside initial guidance of T+125bp area. It also raised another $500mn via a 10Y bond at a yield of 4.816%, 30bp inside initial guidance of T+145bp area. The senior unsecured notes are rated A2/A-. Net proceeds will be used to refinance certain debts and for general corporate purposes. CK Hutchison Holdings Limited is the guarantor and is rated A2/A/A-.
MGM Resorts raised $850mn via a 5NC2 bond at a yield of 6.125%, 12.5bp inside initial guidance of 6.25% area. The senior unsecured bonds are rated B1/BB-/BB-. Proceeds will be used to repay existing debt, including its outstanding 5.75% 2025s. Any remaining proceeds may be invested in short-term interest-bearing accounts, securities or similar investments. The new bonds were priced 8bp wider to its existing 6.125% 2029s (callable in 2026) that yield 6.04%.
Genting New York raised $525mn via a 5NC2 bond at a yield of 7.25% vs. initial guidance of 7.25-7.50% area. The senior unsecured bonds are rated BB+/BBB-. Proceeds will be used to repay its existing Term Loan A and refinance its existing senior unsecured notes.
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