Woolworths tightens pricing on $450m in bonds due to strong demand
Make us a preferred source
Make us a preferred source on Google
The news: Australian supermarket chain Woolworths is set to price $450 million in fixed-rate bonds after receiving around $1.75 billion in interest from potential investors, according to two market sources. It mandated Mizuho, MUFG, NAB and ANZ to handle the bond issue.
The numbers: Capital Brief previously reported that the $46 billion ASX-listed giant was shopping around the Australian-dollar fixed income aisle on Tuesday.
It put out indications of interest on Wednesday with potential pricing in the area of 155 basis points (bps) over seven and a half-year swap rates. However, due to whopping demand, it is now set to price the bonds in the 135-138 bps area, the sources said.
The context: Woolworths is looking to take care of around $400 million in debt due April next year, and market sources had varying opinions as to why there was so much demand for the bonds and why they will price 20 bps cheaper than indications of interest.
Opinions on the high amount of interest included 'fear and scarcity' in the Australian bond market regarding new issuances, and the fact Woolworths is a comfortable investment with a reputable credit rating.
