Bombardier borrows US$750M in boosted junk-bond offering
Bloomberg News
,(Bloomberg) -- Canadian private-jet maker Bombardier Inc. sold a $750 million junk bond Friday to help refinance debt due in 2026, raising the size of the offering and getting slightly better terms than it initially expected.
The seven-year bond deal comes with a 7.287% coupon, according to a person familiar with the matter. The Montreal-based firm had originally sought to borrow $500 million, for which a coupon of as much as 7.5% had been discussed, the person said, asking not to be identified discussing a private matter.
Bombardier’s debt sale coincided with high-yield spreads — the extra yield investors demand over Treasuries — hovering around their lowest in about two years. The company last issued debt in November, raising $750 million at the time by selling seven-year bonds with a call option after three years at yield of 8.75%.
A representative for Bombardier declined to comment.
Bombardier also announced on Friday that it is redeeming about $200 million of its $1.7 billion of notes due 2027.
Read More: Junk Issuers Rush to Refinance With Spreads Lowest Since 2022
Friday’s transaction “priced well inside of the single B average level, and just shy of B+ levels, thus offering some tightening potential should Bombardier achieve high B ratings as we expect they will this year,” Matt Woodruff, an analyst at CreditSights Inc., wrote in a March 25 note.
Improving credit quality and growing liability management capacity increases chances that the firm could score an upgrade, especially as it chips away at a $2.8 billion maturity wall coming due in 2026-2027, Bloomberg Intelligence credit analyst Matthew Geudtner wrote in a note.
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