Stoneridge Inc., the maker of electrical parts and systems for medium- and heavy-duty trucks, is marketing notes as relative yields on speculative-grade corporate debt signals a “nascent recovery” in the economy.
Stoneridge plans to sell $175 million of seven-year notes, it said in a statement distributed by PR Newswire. Proceeds will be used to buy back its 11.5 percent debt due in 2012, the Warren, Ohio-based company said.
Issuance of junk-rated corporate bonds is surging as investors gain confidence the economy won’t tumble back into recession and relative yields hover near the lowest in four months. Spreads have tightened to 635 basis points after touching 1,886 basis points in March 2009 and “have leveled off at a magnitude consistent with a nascent recovery,” Standard & Poor’s Diane Vazza wrote in a report on Sept. 21.
The risk premium is “consistent with the end of previous recessionary periods, and we expect it to remain at about the current level in the near term,” Vazza, managing director of global fixed income research, wrote in the report.
The so-called distress ratio for speculative-grade corporate bonds declined to 11.8 percent in September from 12.4 percent a month earlier, Vazza wrote in the report. Distressed debt yields more than 1,000 basis points, or 10 percentage points, more than Treasuries of similar maturities.
The extra yield investors demand to own high-yield corporate debt instead of Treasuries climbed 3 basis points yesterday from 632 basis points, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index. Absolute yields on the debt rose 2 basis points to 8.15 percent.
High-yield bonds are rated below Baa3 by Moody’s Investors Service and BBB- by S&P. A basis point is 0.01 percentage point.
Investment-grade spreads widened 1 basis point to 184 basis points, according to the Bank of America Merrill Lynch U.S. Corporate Master Index. Yields on the debt fell to 3.72 percent, the lowest in daily index data dating to Oct. 31, 1986.
Freescale Semiconductor Inc. sold $750 million of 10-year notes and NBTY Inc. issued $650 million of debt due in 2018 to lead $3.7 billion of high-yield debt offerings yesterday, according to data compiled by Bloomberg.
Microsoft Corp. sold $4.75 billion of bonds in a four-part transaction with the lowest three- and five-year coupon interest rates on record as investment-grade companies issued $8.05 billion of debt, Bloomberg data show.
Stoneridge’s debt maturing in May 2012 has climbed 63 percent since April 2009, when it traded at 61.6 cents on the dollar to yield 32.3 percent, according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority. The debt rose to 100.5 cents yesterday, Trace data show.
The following is a description of at least $10.6 billion of pending sales of dollar-denominated bonds in the U.S.
STADSHYPOTEK AB, the mortgage lender owned by Svenska Handelsbanken AB, plans to sell three-year covered bonds in a benchmark offering, according to a person familiar with the
HYUNDAI MOTOR CO., South Korea’s largest automaker, plans to sell bonds denominated in U.S. dollars, according to a person familiar with the matter. Barclays Plc, Citigroup Inc., HSBC Holdings Plc and JPMorgan Chase & Co. are managing the sale,
BURGAN BANK, the lender part-owned by Kuwait Projects Co., plans to sell 10-year lower Tier 2 bonds in dollars, according to three people with knowledge of the sale. The notes may yield in the 8 percent range, the people said. The bank may sell $300 million to $500 million of bonds, two of the people said.
GERDAU SA, Latin America’s largest steelmaker, hired HSBC Holdings Plc, Banco Santander SA and JPMorgan Chase & Co. to sell benchmark bonds overseas, according to a person familiar with the transaction who declined to be identified because the
TRANSPOWER NEW ZEALAND LTD., which operates New Zealand’s electricity grid, started marketing at least $150 million of bonds to U.S. private investors, according to a person familiar with the plan. National Australia Bank Ltd. and Citigroup Inc.
DOHA BANK QSC, Qatar’s third-largest bank, may raise as much as $1 billion from bond sales, its chief executive officer said. The debt is likely to be 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
TPC GROUP INC. plans to sell $325 million of seven-year notes through its TPC Group LLC unit, according to a statement
STERICYCLE INC. plans to issue $175 million of seven-year, 3.89 percent notes and $225 million of 10-year, 4.47 percent debt after receiving informal commitments from 22 institutional
AFFINION GROUP HOLDINGS INC., the provider of marketing and customer-loyalty plans, intends to sell about $325 million of senior notes due in 2015. Proceeds may be used to repay the
HAPAG-LLOYD AG, Germany’s biggest container-shipping line, is planning a debut high-yield bond issue as it seeks to raise $500 million to refinance debt. The notes in euros and dollars will have maturities of five and seven years, according to a banker involved in the transaction. The five-year notes will be callable after three years, while the seven-year notes can be
CHINA MEDICAL TECHNOLOGIES INC., which makes devices for tumor treatments, plans to sell as much as $200 million of five-year senior notes denominated in dollars, the company said in a statement distributed by PR Newswire. Proceeds will be used to buy back convertible notes due in 2011 and 2013, Fitch Ratings said in a statement. Deutsche Bank AG and Standard Chartered Plc will help the Beijing-based company arrange meetings with investors in Hong Kong, Singapore, London and the U.S., said a
LODGENET INTERACTIVE CORP. plans to sell $435 million of
VERTELLUS SPECIALTIES INC. plans to sell $325 million of five-year notes, according to a person familiar with the
STONERIDGE INC. plans to sell $175 million of seven-year notes, according to a statement distributed by PR Newswire.
HARVEST OPERATIONS CORP., a unit of Korea National Oil Corp., may sell $500 million of seven-year notes, according to a person familiar with the offering. Proceeds may be used to repay debt and for general corporate purposes, said the person, who
YASAR HOLDING AS, a Turkish company that makes dairy and meat products, paint and paper, plans to sell five-year notes denominated in U.S. dollars, said a person familiar with the matter. Barclays Plc is managing the sale, which will be used to fund a senior loan to Yasar from Barclays Bank Plc, said the
EVERTEC INC., the processing unit of Popular Inc., a Hato Rey, Puerto Rico-based bank holding company, plans to sell $220 million of seven-year notes, according to a person familiar with the offering. Proceeds will help pay for the acquisition of 51
LIBERTY TIRE RECYCLING plans to sell $200 million of six-year notes, according to a person familiar with the offering. Proceeds may be used to repay bank debt and for general
WEST CORP., the communications-services provider taken private by Thomas H. Lee Partners LP and Quadrangle Group LLC in 2006, plans to sell $500 million of notes due 2018 to repay bank debt, according to Standard & Poor’s. S&P assigned the debt a grade of B, the credit rater said in a statement. Moody’s
DINEEQUITY INC., the owner of Applebee’s Neighborhood Grill & Bar and the IHOP pancake chain, plans to sell as much as $825 million of eight-year senior unsecured notes, the company said in a statement distributed by Marketwire. Proceeds may be used to help fund tender offers for “certain series of its
REYNOLDS GROUP HOLDINGS LTD., the maker of Reynolds Wrap aluminum foil, may sell $2 billion of senior secured notes and $1.5 billion of senior unsecured notes to help pay for its purchase of Pactiv Corp., according to a person familiar with the transaction who declined to be identified because terms
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. Moody’s Investors Service ranked the proposed notes at Ba2, citing growing personal consumption in China, E-Land Fashion’s moderate scale and significant business volatility. Proceeds will be used mainly for capital
Offerings in Pipeline
SYDNEY AIRPORTS CORP. hired Bank of America Merrill Lynch, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to
AEGIS LTD., an outsourcing unit of Essar Group, may sell the first non-convertible dollar bonds from an Indian information technology company. The company, which bought PeopleSupport Inc. in 2008, may sell its bonds as part of a financing package that would include a loan of as much as $350
AMERICAN INTERNATIONAL GROUP INC., the insurer that’s majority owned by the U.S., may sell bonds to help repay its
GATX CORP., a Chicago-based company that leases railroad cars and other equipment, filed a shelf registration with the Securities and Exchange Commission to sell debt securities and
JSW STEEL LTD, India’s third-largest steelmaker, plans to sell dollar bonds for the first time in three years and as rupee-denominated finance costs rise. JSW has applied for credit ratings before a possible offshore bond sale to help build a 200
ARGENTINA may sell $1 billion of bonds due in 2017, El Cronista newspaper reported, without saying how it obtained the information. The government is also planning to offer an
RURAL ELECTRIFICATION CORP., India’s state-owned lender to power projects, may sell as much as $300 million of bonds in U.S. dollars, Finance Director Hari Das Khunteta said in a telephone interview. Rural Electrification plans to raise $500
CZECH REPUBLIC plans to sell as much as $2 billion of dollar bonds to diversify from koruna and euro debt, Eduard
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
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 Latin Finance conference
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 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
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 was considering a “no-deal roadshow” to gauge international investors’ appetite, Kwetey said in a May 26 interview in Abidjan. Ghana sold its
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
MONGOLIA plans to raise $500 million selling bonds in 2010 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 after Europe’s debt crisis drove up borrowing costs. Investment banks are advising Mongolia to issue debt with maturities of 5 years to 10 years, Finance Minister Sangajav Bayartsogt said in a Feb.