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Aircastle Plans Debt Amid Heaviest Issuance Since April: New Issue Alert

Aircastle Ltd., the commercial- aircraft lessor, is marketing debt as companies sell corporate bonds at the fastest pace since April.

Aircastle plans to sell $300 million of notes due in 2018, according to a statement distributed by PR Newswire. The Stamford, Connecticut-based company’s high-yield, high-risk notes may be sold as soon as today, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

Corporate borrowers have sold $73.9 billion of bonds in July, exceeding $65.7 billion in June and $32.8 billion in May, according to data compiled by Bloomberg. April sales were $86.7 billion. Investors expect continued issuance “on the heels of positive earnings,” said Edward Meigs, a money manager at Dwight Asset Management Co. in Baltimore.

“There’s a lot of cash to be put to work across the board with money managers,” Meigs, who oversees $600 million of junk bonds, said in a telephone interview. “Deals are being upsized, pricing at the tight end of price talk and generally performing well.”

Of the 156 companies in the Standard & Poor’s 500 Index that reported earnings since July 12, 83 percent have beaten the average analyst forecast, Bloomberg data show. More than 160 S&P 500 companies are scheduled to post quarterly results this week.

The extra yield investors demand to own speculative-grade debt instead of Treasuries narrowed 5 basis points to 654 basis points, the lowest since May 18, according to the Bank of America Merrill Lynch U.S. High Yield Master II index. Absolute yields fell 5 basis points to 8.596 percent, the index data show. A basis point is 0.01 percentage point.

Yesterday’s Sales

Corporate bond sales were $6.35 billion yesterday, following no issuance on July 23, Bloomberg data show.

Vantage Drilling Co., the provider of offshore energy drilling services, led junk-debt sales, issuing $1 billion of 11.5 percent, five-year notes, Bloomberg data show. Advanced Micro Devices Inc., the second-largest maker of microprocessors, was the second-biggest, selling $500 million of senior notes due 2020, Bloomberg data show. The company posted sales that beat analysts’ estimates on July 15. Junk bonds are rated below Baa3 by Moody’s Investors Service and BBB- by S&P.

“We got off to a pretty quick start as far as new deals being announced in several different sectors,” Meigs said, referring to yesterday’s issuance. “Clearly the market’s wide open.”

Westpac Banking Corp., Australia’s second-biggest lender, led overall corporate debt sales, issuing $3 billion of dollar- denominated debt in two parts, Bloomberg data show. Alcoa Inc., the largest U.S. aluminum producer, led nonfinancial investment- grade debt issuance, selling $1 billion of 10-year notes. Alcoa’s issue was the biggest in two years, the data show.

Spreads Narrow

Intel Corp. is the world’s biggest chipmaker, and Commonwealth Bank of Australia is the nation’s biggest lender.

Investment-grade spreads narrowed 2 basis points to 191 basis points, according to Bank of America Merrill Lynch’s U.S. Corporate Master index. Absolute yields fell 2 basis points to 4.14 percent, the index data show. Last week, yields fell to 4.11 percent, the lowest since March 2004.

Aircastle plans to use proceeds from its offering to repay debt and for general corporate purposes, including “the purchase of aviation assets,” it said in the statement.

The company has about 130 aircraft and no scheduled debt maturities until the second half of 2013, executives said in a June 14 conference call.

Following is a description of at least $5.34 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

DOHA BANK QSC, Qatar’s third-largest bank, may raise as much as $1 billion from bond sales, its chief executive officer said. The money is likely to be raised for five years and is meant to “fix the maturity mismatch” on the bank’s balance sheet, Raghavan Seetharaman said in a June 16 telephone interview from Doha. The bank will sell the bonds by the end of this year in both dollars and the loyal riyal currency, the CEO said in a July 25 interview. The lender said in April that it planned to sell senior notes in dollars in a statement on the Qatari bourse, without disclosing the size of the offering.

CAISSE D’AMORTISSEMENT DE LA DETTE SOCIALE, the state agency charged with funding France’s social security debt, plans to sell three-year bonds in dollars that may be priced to yield 28 basis points more than the benchmark mid-swap rate, according to a banker involved in the transaction. JPMorgan Chase & Co., RBC Capital Markets and UBS AG are managing the sale, the banker said.

NOMURA HOLDINGS INC. Japan’s largest brokerage, plans to sell dollar-denominated sukuk, or Islamic bonds, in Malaysia, according to a July 6 company statement. Nomura may sell $100 million of Ijarah sukuk that will mature in 2012. The securities will yield 160 basis points more than the London interbank offered rate, said Jamelah Jamaluddin, chief executive officer of Kuwait Finance House (Malaysia) Bhd., a unit of Kuwait’s biggest Islamic bank, the sale arranger. Standard & Poor’s assigned a preliminary rating of BBB+ to the sukuk.

CHILE hired JPMorgan Chase & Co, Citigroup Inc. and HSBC Holdings Plc to arrange the country’s first international bond sale in six years, Finance Minister Felipe Larrain said. Chile will use proceeds of the 10-year bonds to help finance rebuilding after a February earthquake, Larrain said. The government plans to sell $1 billion of the securities in dollars and $500 million “denominated in pesos,” Larrain said. Moody’s upgraded Chile to Aa3 from A1 on June 16, citing “economic and financial resilience even in the face of major adverse shocks, including February’s historic earthquake.”

FORETHOUGHT FINANCIAL GROUP INC. plans to sell $150 million of 10-year bonds, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. S&P assigned the notes a grade of BBB- in a March 24 report.

Not Rated

BANCO PANAMERICANO SA, the lender controlled by media magnate Silvio Santos, plans to sell $300 million of five-year dollar bonds as soon as this week, according to a person familiar with the transaction. The Sao Paulo-based bank hired Banco Bradesco SA, Itau Unibanco Holding SA, Standard Bank Group Ltd. and UBS AG to arrange the sale of senior unsecured notes, said the person, who declined to be identified because terms aren’t set.

The PROVINCE OF CORDOBA, Argentina, plans to sell as much as $350 million of bonds in international markets once the federal government completes a restructuring of defaulted debt, Banco de Cordoba said.

SENSIENT TECHNOLOGIES CORP. said it entered into an agreement with a group of four financial institutions for the issuance of $110 million in fixed-rate, senior notes, according to a Nov. 19 statement distributed by Business Wire. The company plans to issue seven-year debt to repay existing indebtedness, Sensient said in a March 1 regulatory filing.

High Yield

AIR CANADA, the country’s largest airline, plans to sell $900 million of senior secured notes due 2015 to be issued in U.S. dollars and Canadian dollars, the company announced in a statement distributed through CNW Telbec. Air Canada intends to use some of the proceeds to repay debt under its July 2009 credit agreement, according to the statement. Moody’s Investors Service assigned a B2 rating to the proposed notes. The dollar- denominated notes may yield 9.5 percent to 9.75 percent, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

AIRCASTLE LTD., the Stamford, Connecticut-based commercial- aircraft lessor, plans to sell $300 million of notes due in 2018, according to a statement distributed by PR Newswire. The notes, non-callable for four years, may be rated BB by S&P and an equivalent Ba2 by Moody’s, according to a person familiar with the transaction who declined to be identified because terms aren’t set.

KCA DEUTAG DRILLING GROUP LTD., a unit of private-equity investor First Reserve Corp., is planning to sell $500 million of eight-year bonds through Turbo Beta Plc, according to Alex Christou, an Aberdeen, Scotland-based spokesman for the oil- services company. Goldman Sachs Group Inc. is managing the sale with HSBC Holdings Plc, Lloyds TSB Banking Group Plc, Royal Bank of Scotland Group Plc and Natixis, a person with knowledge of the transaction said. The notes may be rated CCC by S&P and Caa2 by Moody’s, according to a statement on the company’s website.

MARINA DISTRICT FINANCE COMPANY INC., owner of the Borgata Hotel Casino & Spa in Atlantic City, plans to sell $725 million of senior secured debt in two parts, according to a person familiar with the transaction. The notes will be due in 2015 and 2018, said the person, who declined to be identified because terms aren’t set. Marina District Finance is Boyd Gaming Corp.’s joint venture with MGM Resorts International. Proceeds will be used to repay bank debt and fund a dividend, the person said.

TRILOGY INTERNATIONAL PARTNERS LLC, the wireless communications provider, plans to sell $370 million of senior secured notes, according to Moody’s Investors Service. Moody’s rated the notes Caa1, it said in a report. Proceeds will be used to refinance debt and finance growth in New Zealand, Moody’s said. S&P rated the debt an equivalent CCC+. The notes will have a maturity of six years, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

UNIVERSAL HEALTH SERVICES INC., the operator of more than 100 U.S. medical facilities that’s buying Psychiatric Solutions Inc., cut its offering of senior unsecured notes to $250 million, according to a person familiar with the transaction. It increased the size of the term loans it’s seeking by $100 million, said the person, who declined to be identified because terms aren’t set. The King of Prussia, Pennsylvania-based company previously planned to issue $400 million of senior unsecured debt to help finance the acquisition, according to a filing with the Securities and Exchange Commission.

E-LAND FASHION CHINA HOLDINGS LTD, the Hong Kong-based apparel products provider, hired Morgan Stanley to help it sell $200 million of three-year bonds, according to a person familiar with the matter. The company plans to begin meeting with investors in Asia, Europe and the U.S. on July 19, said the person who declined to be identified because terms aren’t set. Moody’s Investors Service assigned the proposed notes a Ba2, citing growing personal consumption in China, E-Land Fashion’s moderate scale and significant business volatility. Proceeds will be used for mainly for capital expenditures and general corporate purposes, Moody’s said in the report.

ENERGYSOLUTIONS INC., the Salt Lake City-based nuclear services company, has amended its credit facility and plans to refinance that debt with borrowings under new loans and an offering of senior notes, the company said July 13 in a statement distributed by Marketwire. Standard & Poor’s assigned the proposed $300 million senior unsecured notes due 2018 a BB- on July 15.

GENTIVA HEALTH SERVICES INC., the U.S. home-nursing company that is buying Odyssey HealthCare Inc., plans to sell $305 million of eight-year notes, the Atlanta-based company said in a May 24 regulatory filing, without specifying the timing of the transaction. Proceeds will be used to help fund the takeover, according to the filing. Standard & Poor’s assigned the unsecured notes a B- credit rating on June 29. Moody’s Investors Service rated the notes a grade of B2 and ranked $925 million of loans three steps higher at Ba2, it said in a report.

PROMSVYAZBANK OJSC, Russia’s third-largest private bank, plans to sell $200 million of six-year loan participation notes at a yield of 11.25 percent, according to two people with knowledge of the sale.

TITAN INTERNATIONAL INC., the maker of tire and wheel systems for off-highway equipment, said it plans to sell at least $150 million of senior unsecured notes. Proceeds will be used to repurchase the 8 percent senior unsecured notes due in 2012 and for general corporate purposes, the Quincy, Illinois- based company said in a May 13 statement distributed by Business Wire.

INVENTIV HEALTH INC., the provider of sales and marketing services to science companies that is being acquired by Thomas H. Lee Partners, may sell $275 million of senior notes to back the purchase, it said in a regulatory filing. Standard & Poor’s assigned a B- rating to the proposed notes due 2018. Moody’s Investors Service assigned them a Caa1.

Offerings in Pipeline

BELARUS plans to sell five-year bonds in dollars, according to two people with knowledge of the sale. BNP Paribas SA, Deutsche Bank AG, Royal Bank of Scotland Group Plc and OAO Sberbank are managing the sale, the people said. The notes may yield 9 percent to 9.25 percent, according to a banker involved with the transaction.

NATIONAL BANK OF EGYPT, the country’s largest lender, plans to sell its first international bonds and is meeting with fixed- income investors, according to three people familiar with the plan. The Cairo-based bank may offer a benchmark-sized issue, said a banker, who declined to be identified because terms aren’t set. The lender received approval from Egypt’s central bank to sell as much as $1.5 billion of bonds and is meeting with investors in Asia, London, Germany, the Middle East, and Eastern Europe, said a bank official, who declined to be identified. Benchmark issues are typically for at least $500 million.

BANCO BMG S.A., a Brazilian lender specializing in loans to state retirees and workers, plans to sell 10-year bonds in dollars, according to a person familiar with the offering. The Belo Horizonte-based bank hired Banco Bradesco SA, BCP Securities, Morgan Stanley and Banco Santander SA to arrange the sale, said the person, who declined to be identified because terms aren’t set.

IDBI BANK LTD., an Indian state-owned lender, is considering a sale of bonds denominated in U.S. dollars to raise about $500 million, Executive Director Melwyn Rego said in an interview on July 21. HSBC Holdings Plc and Barclays Plc have been hired to oversee the bank’s medium-term note program, Rego said. BNP Paribas SA, Royal Bank of Scotland Group Plc and Standard Chartered Plc will help manage this sale of benchmark notes, to be done through its Dubai branch, he said. The bonds may have a maturity of five to five-and-a-half years, said Rego.

CZECH REPUBLIC plans to sell as much as $2 billion of dollar bonds to diversify from koruna and euro debt, Eduard Janota, whose term as finance minister ended this week, said in an interview for Mlada Fronta Dnes newspaper.

POTASH CORPORATION OF SASKATCHEWAN INC., the world’s largest fertilizer company by capacity, filed a registration statement with the U.S. Securities and Exchange Commission for $2 billion of debt securities.

INDONESIA plans to name three banks to help it sell approximately $650 million of Islamic bonds in October, Dahlan Siamat, director for Islamic financing at the finance ministry, said in a telephone interview in Jakarta. The government sold its first international Islamic dollar bonds in April 2009.

OAO GAZPROMBANK, the lending unit of Russia’s gas export monopoly, hired Barclays Capital, Royal Bank of Scotland Group Plc, and UBS AG to organize meetings with investors in Europe and Asia starting July 5, according to two people with knowledge of the transaction.

CORPORACION FINANCIERA DE DESAROLLO SA Peru’s state development bank known as Cofide, plans to sell as much as $250 million of dollar-denominated bonds, according to Chief Financial Officer Carlos Linares. Linares said in an interview in Lima, that the lender is selling long-term debt as it boosts lending to local infrastructure projects. “Peru’s need for infrastructure is huge,” Linares said. “The government is trying to promote foreign investment in a long list of projects.”

SRI LANKA plans to sell dollar-denominated bonds, according to its central bank. The South Asian country’s third-ever overseas offering is likely after August, Central Bank of Sri Lanka Assistant Governor C.J.P. Siriwardena said in a telephone interview on June 30.

GEORGIAN RAILWAY LTD. plans to sell five-year bonds in dollars that may be priced to yield about 10 percent, according to two people with knowledge of the sale. The company hired Bank of America Corp.’s Merrill Lynch unit and JPMorgan Chase & Co. to manage the transaction.

JORDAN plans to sell about $500 million of bonds, Finance Minister Mohammad Abu Hammour said in an interview on June 23. The sale will be denominated in U.S. dollars “as it’s a stable currency and the Jordanian dinar is pegged to it,” Abu Hammour said.

URUGUAY may sell as much as $1 billion of bonds in 2011, including $500 million of dollar-denominated debt, Carlos Steneri, director of public credit at Uruguay’s Ministry of Economy and Finance, said June 3 at a LatinFinance conference in London. The dollar-denominated bonds may have a maturity of 20 years or more, Steneri said.

MALAYSIA plans to raise about $1 billion from its first sale of conventional dollar bonds in eight years after drawing bids for five times the Islamic debt it offered, a finance ministry official said. The government may hire the same banks, including CIMB Group Holdings Bhd. and HSBC Holdings Plc, to arrange the sale by Sept. 30, said the official, who declined to be named as the discussions are private. Malaysia raised $1.25 billion from a Shariah-compliant dollar bond on May 27. Malaysia is rated A3 by Moody’s and A- by S&P.

SABIC CAPITAL, a unit of Saudi Basic Industries Corp., will sell bonds when market conditions and rates are favorable, its vice president for corporate finance Mutlaq al-Morished told al- Arabiya television in Dubai on June 16. Sabic delayed a bond sale because of unfavorable spreads, al-Morished said in a May 26 telephone interview. Sabic Capital had hired HSBC Holdings Plc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to manage a benchmark-sized offering.

GHANA is considering selling its second dollar bond in 2011 to tap investor demand as the start-up of oil production boosts economic growth and narrows the budget deficit, Deputy Finance Minister Fifi Kwetey said. The government is considering a “no- deal roadshow” as early as the fourth quarter to gauge international investors’ appetite, Kwetey said in a May 26 interview in Abidjan. Ghana sold its first global bond in 2007, raising $750 million to help fund the construction of roads and power plants.

ANGOLA received credit ratings from Moody’s, S&P, and Fitch Ratings that put it on par with Nigeria, Lebanon and Belarus, and paved the way for a planned sale of international bonds. The southern African nation’s creditworthiness was rated at B+ by S&P and Fitch, four levels below investment grade. Moody’s assigned an equivalent ranking of B1.

EURASIAN NATURAL RESOURCES CORP., a London-based iron ore and alumina producer with operations in China and Russia, said it delayed its first dollar bond sale. The company is “postponing meetings with investors regarding a potential bond issuance under its Euro Medium Term Note program until further notice,” Charlotte Kirkham, a spokeswoman for ENRC, said in an e-mail. The company had hired Deutsche Bank AG and Morgan Stanley to manage the sale, according to a person familiar with the transaction.

CHINA ORIENTAL GROUP CO. plans to sell senior notes to provide working capital and possibly to finance the purchase of steel mills and iron ore assets in China. Deutsche Bank AG will manage the sale with ING Groep NV, according to a statement to the Hong Kong stock exchange.

BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM received approval from the central bank to issue 7 trillion dong ($369 million) of notes and another 3 trillion dong of dollar- denominated notes in 2010, according to a statement on State Bank of Vietnam’s Web site.

BOLIVIA plans its first international bond sale in more than 70 years as early as the end of 2011, Finance Minister Luis Arce said. He didn’t disclose the size of the offering.

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP. of the Philippines may sell between $750 million and $1.5 billion of dollar-denominated bonds “anytime” to help refinance maturing debt through next year, Vice Chairman Jose Ibazeta said. The company manages the finances of state utility National Power Corp.

BRISBANE AIRPORT CORP., owner of Australia’s third-busiest airport, may sell bonds in the U.S. later this year as it pursues new markets to help refinance debt and pay for a new runway. The company is considering a 10- or 15-year U.S. private placement and a five- to seven-year Australian dollar bond sale in late 2010 or early 2011, Chief Financial Officer Tim Rothwell said in a phone interview from Brisbane.

VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP, the state- owned coal producer known as Vinacomin, plans to sell as much as $500 million of bonds overseas this year to fund mining and energy projects, according to Deputy Chief Executive Officer Nguyen Van Hai.

FINLAND may sell five-year bonds denominated in dollars this year, the Finnish Treasury said in a document posted on its Web site.

MONGOLIA plans to raise $500 million selling bonds this year and the remainder of a planned $1.2 billion program will be sold according to market conditions, Batbayar Balgan, director general of the financial and economic policy department of Mongolia, said at a forum in Ulan Bator on June 16. The government scaled back its plans for global bond sales this year after Europe’s debt crisis drove up borrowing costs. Investment banks are advising Mongolia to issue debt with maturities of 5 to 10 years, Bayartsogt said in a Feb. 9 interview. The securities may yield 8 percent to 11 percent, he said.

To contact the reporters on this story: Sapna Maheshwari in New York at sapnam8@bloomberg.net.

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