Bankrate Plans Debt Amid ‘Attractive’ Values: New Issue Alert

Bankrate Inc., the online personal-finance network, is marketing debt as corporate bonds may offer more attractive valuations than Treasuries.

Bankrate, which provides interest information on products from credit cards to mortgages, may sell $280 million of five-year notes to help pay for the acquisition of NetQuote Inc. and Inc., according to a person familiar with the offering who declined to be identified because terms aren’t set.

Relative yields on high-risk, high-yield corporate debt are trading to account for a default rate higher than what “market watchers” expect in the coming 12 months, Morgan Stanley said in a June 21 research note. Spreads on junk bonds imply a default rate of about 7 percent, more than the 4 percent or 5 percent that is expected, the note said.

“With valuations that are significantly more attractive in high yield and slightly more attractive in high grade, as well as a general lack of yield in other fixed income assets, we believe investors will be inclined to edge back into both high yield and investment-grade credits,” the New York-based securities firm said in the note from analysts led by chief investment officer Jeff Applegate and chief investment strategist David M. Darst.

The yield on the 10-year U.S. Treasury bond, the market bellwether, fell to 3.12 percent yesterday, the lowest since May 2009, from 3.17 percent on June 22.

Default Outlook

The default rate for U.S. speculative-grade issuers, rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s, may fall to 2.7 percent by December, Moody’s said yesterday in an e-mailed report. Fitch Ratings said the pace of defaults by high-yield issuers has slowed to a full-year rate of about 1 percent, according to a June 21 report. That compares to a 13.7 percent rate in 2009 after 151 defaults, Fitch said.

“As long as we don’t double-dip, I think high-yield is going to do fine,” said Matt Freund, a money manager at USAA Investment Management Co., who helps oversee $44 billion in assets in San Antonio, Texas. “The high yield side seems it may be in a sweet spot here.”

Jeffries Group Inc., a New York-based brokerage, sold $400 million of notes due in 2021 and Mexican bakery Grupo Bimbo SAB issued $800 million of 10-year dollar bonds in yesterday’s largest corporate debt sales, Bloomberg data show. Sales have risen 57 percent this week to $14.6 billion through yesterday, compared with $9.3 billion over the similar period a week earlier, the data show.

Bankrate Acquisitions

Bankrate, acquired by Apax Partners LLP in September, is buying NetQuote and for a combined cost of about $350 million, Moody’s and S&P said in separate reports. Moody’s rated the proposed offering B2, and S&P assigned a B ranking.

The extra yield investors demand to own speculative-grade company debt rose 7 basis points to 682 basis points yesterday. Junk bond spreads declined to a one-month low of 668 basis points on June 21, according to Bank of America Merrill Lynch index data. A basis point is 0.01 percentage point.

Spreads on investment-grade corporate debt rose 1 basis point, to 206 basis points, according to the Bank of America Merrill Lynch U.S. Corporate Master Index.

Following is a description of at least $3.77 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

CHILE plans to sell $1 billion of 10-year bonds, along with warrants and peso debt, according to a filing with the U.S. Securities and Exchange Commission. Chile will use the proceeds for general purposes, the filing said. The country, which hasn’t sold international bonds in six years, is seeking financing for repairs after a Feb. 27 earthquake and subsequent tsunami killed

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 hasn’t decided which currency to sell the bonds in, he said. The lender said in April that it

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

Not Rated

The PROVINCE OF CORDOBA, Argentina, plans to sell as much as $350 million of bonds in international markets once the

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

High Yield

PROMSVYAZBANK OJSC, Russia’s third-largest private bank, hired banks to arrange investor meetings, according to a banker with knowledge of the matter. S&P affirmed its B counterparty credit rating on the company in April and revised its outlook to

PT BERAU COAL, the Indonesian mining company, may market five-year notes in Singapore and London later this month,

CKE RESTAURANTS INC. may sell $600 million of eight-year notes, according to a person familiar with the transaction. The

DYNCORP INTERNATIONAL INC., the defense contractor being taken over by Cerberus Capital Management LP, plans to sell $455 million sale of seven-year notes to help finance the takeover

BANKRATE INC., the online consumer personal finance network, may sell $280 million of five-year notes to help pay for the acquisition of NetQuote Inc. and Inc., according to a person familiar with the transaction. Jeffries & Co. and RBC Capital Markets are managing the offering of notes,

AKBANK TAS, the Turkish bank part-owned by Citigroup Inc., plans to sell five-year, dollar-denominated eurobonds worth up

CEDAR FAIR ENTERTAINMENT CO., the operator of amusement parks that called off a takeover by an Apollo Management LP affiliate, said it plans to sell $500 million of senior unsecured notes due in 2020. Proceeds will be used to repay

IRSA INVERSIONES Y REPRESENTACIONES SA, Argentina’s biggest real-estate company, extended an offer to sell $250 million in 10-year bonds until June 24, the company said in a regulatory

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-

INVENTIV HEALTH INC., the provider of sales and marketing services to science companies that is being acquired by Thomas

Offerings in Pipeline

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

BANK OF EAST ASIA LTD. hired Citigroup Inc. and JPMorgan Chase & Co. to help it sell subordinated 10-year bonds in dollars, according to a person with direct knowledge of the

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

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

INDOSAT PALAPA CO., a unit of Indonesia’s second-largest phone operator, delayed a planned dollar bond sale until market conditions improve, a person familiar with the matter said May 26. Indosat began meetings with investors in Asia, the U.S. and Europe on May 12 to gauge demand for a global bond sale, according to a company statement sent to the Indonesian stock

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

GHANA is considering selling its second dollar bond next year 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,

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 this year. The southern African nation’s creditworthiness was rated

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

KAZAKHSTAN plans to sell between $500 million and $750 million in bonds to investors abroad in the autumn, Kazakh Finance Minister Bolat Zhamishev said in a May 14 interview. The

QATARI DIAR REAL ESTATE INVESTMENT CO. may raise about $1.5 billion by selling global bonds backed by Qatar, according to a person familiar with the sale plan. The developer may offer 10-year conventional bonds and 5-year Islamic securities, said the person who declined to be identified because details of the transaction haven’t been completed. HSBC Holdings Plc and

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

OAO SBERBANK , Russia’s biggest lender, may sell $1 billion of dollar-denominated bonds for the first time in two years when debt markets improve, Deputy Chief Executive Officer Anton Karamzin said. Sberbank will consider selling $1 billion of “five-year senior unsecured” notes to establish a benchmark “if the price is right,” Karamzin said. Sberbank hired DZ Bank AG, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to

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-

BOLIVIA plans its first international bond sale in more

KOREA FINANCE CORP. hired BNP Paribas SA and Standard Chartered Plc to help it sell dollar bonds backed by Korean residential mortgages, according to a person familiar with the transaction. The banks will help arrange meetings with investors in Asia, Europe and the U.S., the person said. Edaily reported in April that the company planned to sell $100 million to $200 million of foreign-currency bonds in its first overseas debt sale since October, without citing anyone. The state-run agency

PTT EXPLORATION & PRODUCTION PCL, the Thai oil explorer, hired Credit Suisse Group AG and Royal Bank of Scotland Group Plc to help it sell global bonds, according to two people

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

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

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

FINLAND may sell five-year bonds denominated in dollars

POLAND may sell dollar bonds if markets stabilize, Deputy Finance Minister Dominik Radziwill said. The European Union

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

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