Bookbuild opens on Orica hybrid

Pricing likely to be favourable for the Australian explosives company thanks to a new ratings treatment and a five-year step-up structure.
Macquarie Bank and Citigroup have begun a two-day bookbuild to determine the margin that Orica will pay on a circa A$400 million hybrid securities deal.

The first large industrial company to issue a hybrid in Australia this year, Orica will pay a yield of between 6.5% and 7.5% above the 180-day bank bill swap rate and price talk is at the tight end of this range. Demand may see the issuer increase the size of the transaction to A$500 million.

The stapled securities with a face value of A$100 comprise a fully-paid preference share and a fully-paid unsecured note. The securities rank ahead of OricaƆs ordinary shares, but behind its existing preference shares and all...

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