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Europe: Jaguar Land Rover drives by high yield bond mart with £300M offering

Jaguar Land Rover logoJaguar Land Rover is driving by the high-yield market with a £300 million offering of eight-year (non-call life) unsecured notes via physical bookrunners Deutsche Bank (B&D), Bank of America Merrill Lynch, HSBC, and Morgan Stanley, alongside non-physical bookrunners Credit Agricole CIB, Lloyds, and Societe Generale CIB.

There will be an investor call today at 2:00 p.m. GMT, and pricing will take place thereafter.

Proceeds, together with £118 million of cash will be used to refinance debt. Specifically, £414 million will be used to repurchase the borrower’s sterling- and dollar-denominated 2018 notes, as well as for general corporate purposes.

In order to refinance the 2018 notes, Jaguar has launched two tender offers: one for its $410 million of 7.75% notes due 2018, and one for its £500 million of 8.125% notes due 2018. Both notes are currently governed by a make-whole premium of 50 bps over treasuries/gilts, and this translates into a cash price of 107.9 on the dollar notes, and 108.2 on the sterling notes – roughly where the bonds are marked this morning. The dollar notes become callable at 105.813 on May 15, 2014, while the sterling notes become callable at 106.094 on the same date.

The company was last in the market in December 2013, with a dollar-denominated issue of 4.125% notes due 2018 via Citi, Credit Suisse, and J.P. Morgan (B&D) as joint physical bookrunners, with additional bookrunners BNP Paribas, RBS, and Standard Chartered. Proceeds were used for general corporate purposes, including the refinancing of its 2018 notes.

Jaguar Land Rover is a U.K. manufacturer of luxury vehicles. It is rated BB/Ba2. – Sohko Fujimoto/Luke Millar

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