By Paul A. Harris
Portland, Ore., Nov. 23 – Luxembourg-based communications satellite owner and operator SES SA priced €550 million of 5 5/8% deeply subordinated fixed-rate resettable securities (expected ratings Ba1/BB+) at 99.304 with a yield to first call of 5¾% on Tuesday, according to a market source.
The yield to call printed on top of final yield talk. Earlier talk was in the 6% area.
The deal was priced on the investment-grade desk.
Asset managers in the United Kingdom comprised the top of the order book, the source said, and added that hedge funds also participated.
“The successful completion of SES’s second hybrid issuance in benchmark size is another important milestone and is an important element of SES’s financing strategy,” Padraig McCarthy, chief financial officer of SES, commented in a company press release.
“The transaction was strongly supported by a wide range of high quality existing and new investors,” McCarthy added.
The deal was SES' second hybrid bond offering, complementary to its first hybrid offering completed in June 2016, and brings the total amount of hybrid debt to €1.3 billion, the release stated.
Joint bookrunner JPMorgan was the global coordinator and structuring agent. Deutsche Bank, Goldman Sachs and HSBC were also joint bookrunners. BBVA and Commerzbank were co-lead managers.
The notes will bear interest at a fixed rate, with interest payable annually. There is a short first payment to be made on Jan. 29, 2017.
The issuer has the option to defer interest payments on a cash cumulative, compounding basis subject to payment if the issuer repays debt of junior or parity status on its capital structure, redeems the perpetual notes or liquidates.
The Betzdorf, Luxembourg-based company plans to use the proceeds for general corporate purposes, including debt repayment.
| Issuer: | SES SA
|
| Amount: | €550 million
|
| Maturity: | Perpetual
|
| Securities: | Deeply subordinated fixed-rate resettable securities
|
| Global coordinator: | JPMorgan
|
| Structuring agent: | JPMorgan
|
| Bookrunners: | JPMorgan, Deutsche Bank, Goldman Sachs, HSBC
|
| Co-lead managers: | BBVA, Commerzbank
|
| Coupon: | 5 5/8%
|
| Price: | 99.304
|
| Yield to first call: | 5¾%
|
| First step-up: | Mid-swaps plus 25 bps on Jan. 29, 2029
|
| Second step-up: | Mid-swaps plus 75 bps on Jan. 29, 2044
|
| First call: | Jan. 29, 2024 at par
|
| Trade date: | Nov. 22
|
| Settlement date: | Nov. 29
|
| Expected ratings: | Moody's: Ba1
|
| S&P: BB+
|
| Distribution: | Regulation S
|
| Price talk: | 5¾%
|
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