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Heineken, the Dutch brewer that is among the most celebrated unrated bond issuers, on Monday sold its first bond with credit ratings -- the Baa1/BBB+ assigned by Moody's and Standard & Poor's the previous Wednesday.
"The deal was a great success, effectively establishing Heineken's credit curve as a rated issuer," said Neil Slee, corporate bond syndicate manager at Credit Suisse, one of the bookrunners. "It was a key strategic trade for them, as their first rated transaction, and the interest from accounts enabled Heineken to get a deal that fit within its objectives."
The deal's success was no surprise, given Heineken's global brand name and rarity as an issuer, and the novelty of this deal being offered with ratings. Yet the extent of demand and tightness of pricing show just how prized the issue was, what a difference a rating makes, and the general buoyancy of the corporate bond market.
Two bankers away from the deal said it had been priced flat to Heineken's curve; Slee said it had come 10bp through the issuer's curve.
There was no specific motivation for the deal, bankers said, other than to obtain attractive funding for general corporate purposes, ahead of a [Euro] 600m bond redemption due in 2013.
Global coordinators Credit Suisse and ING and bookrunners BNP Paribas, HSBC and Rabobank launched the seven and 12 year offering on Monday morning at price guidance of 90bp-95bp and 130bp over mid-swaps.
Buyers fight for sips
The book for the two tranches together swelled to [Euro] 13bn before reconciliation, enabling the leads to tighten guidance by at least 15bp on each tranche.
The final book was over [Euro] 12bn, with more than 750 orders across the two tranches. About [Euro] 7bn of the demand was for the seven year tranche, and [Euro] 5bn for the 12 year.
Guidance on the seven year was first tightened to 80bp-85bp, before it was priced at 75bp over. With a 2.5% coupon, it was priced at 99.279 to yield 144.8bp over the 3.75% January 2019 Bund. The...