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Abengoa Seeks 250 Million-Euro Bond to Repay Loan, Moody’s Says

Sept. 23 (Bloomberg) -- Abengoa SA, the Spanish developer of solar-thermal power plants, is planning to sell 250 million euros ($338 million) of bonds to repay syndicated loans, according to Moody’s Investors Service.

The debt will be added to its 8.875 percent notes due 2018, according to a person with knowledge of the offering, who asked not to be identified because terms aren’t set.

Moody’s assigned a B2 grade to the proposed debt, the ratings firm said in today in report.

Europe’s junk-rated companies are turning to high-yield bonds as borrowing costs from the U.S. to Europe to Japan are held at record-lows. Issuance of the securities made up about two-thirds of European high-yield debt raised this year with the remainder loans, Morgan Stanley analysts wrote in a report last month. This compares with 2011 when companies raised more high-yield loans than bonds, they said.

Abengoa, which has more than 7 billion euros of net debt, is seeking to cut its borrowing by about 1 billion euros by August 2014, it said last month in a presentation. Abengoa plans to use the proceeds to repay syndicated loan borrowings by Jan. 22.

To contact the reporter on this story: Tom Freke in London at tfreke@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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