Lead managers ING and Salomon Smith Barney successfully priced a $125 million Reg S bond for Universal Robina Corporation (URC) yesterday (Monday).
The five-year deal was priced at par with a 9% coupon to yield 618bp over Treasuries. At this level it represented a 100bp premium to the Republic of the Philippine's 8.875% April 2008 bond, or 118bp over the interpolated curve. Both these levels are consistent with historical precedent and the company's parent JG Summit priced a similarly sized $100 million offering almost a year to the day at a 128bp premium to the sovereign curve.
URC's final deal size was slightly smaller than anticipated since it had marketed a $100 million to $150 million deal. However, having been flexible over size, the Ba3/BB rated company was able to keep the yield from breaking the 9% barrier and it also hopes to see secondary market trading hold steady. Having gone out with an indicative range of 8.75% to 9%, many had thought poor market conditions for emerging markets debt would easily push pricing through 9%.
Observers report an order book of about 30 accounts with a geographical split, which saw 34% placed in Hong Kong, 32% in the Philippines, 17% in Singapore and the balance in the rest of Asia and the world.
Unlike many previous Filipino corporate deals, which have a heavy domestic placement bias, URC's offering does have incurrence covenants. Rated Ba3/BB, URC is the flagship company of the JG Summit group.