Until recently, issues of bonds and notes by unrated Australian corporates have been typically few and far between. However, so far in 2016, companies such as Peet Group, Capitol Health, Healthscope and IMF Bentham have all issued bonds and notes of various sorts. While these companies have different very different businesses, the things they have in common are they are all unrated by credit rating agencies, they are all listed on the ASX and their bonds and notes typically have coupons which fall in the range of 7.50% to 9.00%.
TFS Corporation, an ASX-listed company which owns and manages sandalwood plantations, is one of these companies, having first issued USD notes in 2012 and again in 2015. The company has announced it will be issuing USD$250 million senior secured notes which mature in August 2023, with a non-call period of three years and a coupon of 8.75%.
The proceeds will be used to repay USD$200 million of its existing USD notes and to add USD$50 million to the company’s coffers. TFS pointed out the new debt would carry interest at 225bps less than the debt it is replacing as well while extending the company’s debt maturity profile.
The notes are being sold in the US to institutional buyers as a Rule 144A transaction and thus will not be available to retail investors. However, readers interested in this segment of the market can find information on notes and bonds issued by the companies mentioned above, as well as others issued by Crown, AMP and Suncorp in the ASX-Listed Notes page.
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