By Caroline Hyde and Kate Haywood
(Adds that bonds priced to second paragraph.)
Oct. 29 (Bloomberg) -- Telenet Group Holding NV, the Belgian cable operator controlled by John Malone?s Liberty Global Inc., boosted the size of its high-yield bond sale by more than 40 percent to tap investor demand for riskier debt.
Telenet sold 500 million euros ($693 million) of 10-year bonds, up from 350 million euros it initially sought, according to a person with knowledge of the deal. The notes, which Telenet can redeem after five years, were priced to yield 6.375 percent, data compiled by Bloomberg show.
Investors are chasing average returns of 17 percent from high-yield debt, almost triple the year?s gains on investment- grade corporate securities or government bonds, according to Bank of America Merrill Lynch data. The demand spurred $13 billion of junk-rated bond sales in Europe this month, a record for October, Bloomberg data show.
?People have large amounts of cash to put to work and the most efficient way they can do this is by participating in new issues,? said Andrew Wilmont, who helps oversee $5 billion of speculative-grade debt at Axa Investment Managers U.K. Ltd. ?Demand is there for high-yield.?
Investor appetite for the riskier debt has driven borrowing costs for junk-rated companies to the lowest in three years, Bank of America index data show. The yield investors demand to hold high-yield debt held at 7.49 percent this week, the lowest level since July 2007.
Redeem Loans
Telenet, rated Ba3 by Moody?s Investors Service, said yesterday it will use the proceeds from its bonds to redeem shorter-term loans and help fund future shareholder payouts. The company raised its forecast for cash generation this year to more than 225 million euros, from 166.9 million euros in 2009, the Mechelen, Belgium-based company said in a statement.
R&R Ice Cream Ltd. in Northallerton, England boosted its sale of junk-rated notes by 25 percent to 350 million euros this week, Bloomberg data show. The company, rated BB- at Standard & Poor?s and one step lower at B1 by Moody?s, priced the notes to yield 8.375 percent.
High-yield, or junk, bonds are graded below Baa3 by Moody?s and BBB- by S&P.
--Editors: Andrew Reierson, Michael Shanahan
To contact the reporters on this story: Caroline Hyde in London chyde3@bloomberg.net; Kate Haywood in London at khaywood@bloomberg.net.
To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.
No comments:
Post a Comment