By Andrea Heisinger
New York, Feb. 16 - Teck Resources Ltd. priced $1 billion of senior notes (Baa2/BBB/) in two tranches on Thursday, a source close to the trade said.
A $500 million tranche of 3% seven-year paper sold at 99.705 to yield 3.047% with a spread of Treasuries plus 165 basis points. This tranche priced at the tight end of guidance in the 170 bps area.
There is a make-whole redemption at Treasuries plus 25 bps.
There was also a $500 million tranche of 5.2% 30-year bonds priced at 99.533 to yield 5.231% with a spread of 210 bps over Treasuries. The paper sold at the low end of talk in the 210 bps to 215 bps range.
The long bonds have a make-whole call at Treasuries plus 35 bps until Sept. 1, 2041 and can be called at par after.
The notes feature a change-of-control put at 101%.
J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the bookrunners.
Co-managers were CIBC World Markets Corp., Mizuho Securities USA Inc., RBC Capital Markets, LLC, UBS Securities LLC, Barclays Capital Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBS Securities Inc. and Scotia Capital (USA) Inc.
Proceeds, along with cash on hand, are being used to fund the redemption of $530 million of 9.75% notes due 2014 and a portion of $1,043,000,000 in outstanding 10.75% notes due 2019.
The notes are guaranteed by subsidiary Teck Metals Ltd.
The diversified mining company is based in Vancouver, B.C.
| Issuer: | Teck Resources Ltd.
|
| Guarantor: | Teck Metals Ltd.
|
| Issue: | Senior notes
|
| Amount: | $1 billion
|
| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC
|
| Co-managers: | CIBC World Markets Corp., Mizuho Securities USA Inc., RBC Capital Markets, LLC, UBS Securities LLC, Barclays Capital Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., RBS Securities Inc., Scotia Capital (USA) Inc.
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 16
|
| Settlement date: | Feb. 28
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB
|
|
|
| Seven-year notes
|
| Amount: | $500 million
|
| Maturity: | March 1, 2019
|
| Coupon: | 3%
|
| Price: | 99.705
|
| Yield: | 3.047%
|
| Spread: | Treasuries plus 165 bps
|
| Call: | Make-whole at Treasuries plus 25 bps
|
| Price talk: | 170 bps area
|
|
|
| 30-year bonds
|
| Amount: | $500 million
|
| Maturity: | March 1, 2042
|
| Coupon: | 5.2%
|
| Price: | 99.533
|
| Yield: | 5.231%
|
| Spread: | Treasuries plus 210 bps
|
| Call: | Make-whole at Treasuries plus 35 before Sept. 1, 2041, after at par
|
| Price talk: | 210 bps to 215 bps
|
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