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Hecla Mining Pulls $500M High Yield Deal, Cancels Tender Offer

Hecla Mining Company has withdrawn its recently proposed high-yield bond offering, the company said today.

In a June 30 statement, Hecla said “that it has decided not to proceed with its previously announced offer of $500 million of senior notes due 2025, as current terms and conditions were not sufficiently attractive for the company to move forward. “

The deal, marketed via a Bank of America Merrill Lynch–led syndicate, was launched to back a tender offer for the borrower’s outstanding $506.5 million of 6.875% notes due 2021. These bonds served as the company’s market debut in April 2013, and were also the issuer’s last tap. The notes will hit their first call on July 27, 2017 at 103.44.

Coinciding with the scrapped plans for the new issue, the company has also cancelled the tender offer.

The pitched deal was structured with a first call at par, plus 50% of the coupon at year three, and an up to 35% equity claw. Sources said whispers were in the 6% area.

The would-be bond had garnered B/B3 ratings. The issuer on June 28 had also received a corporate ratings upgrade from S&P Global Ratings to B from B–, “due to increased production, lower cash costs, and higher realized silver and gold prices.”

Hecla’s cancelled deal is the third scrapped high-yield transaction of 2017. Charter Communications on June 22 withdrew a proposed offering of $1.5 billion of senior notes due to market conditions. Also, Sequa Corp. in April dropped plans to issue $300 million of 4.5-year secured notes backing a recap transaction.

Coeur d’Alene, Idaho–based Hecla Mining (NYSE: HL), together with its subsidiaries, discovers, acquires, develops, produces, and markets precious and base metal deposits worldwide. — Jakema Lewis

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This story is taken from analysis which first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

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