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Thursday, 20th September 2018
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Deals of the Year 2018: CRH's return to US dollar bond market a resounding success    
The winning 'Deal of the Year' in the 'Debt Capital Markets - Corporate Bonds' category is CRH's dual tranche issuance in May of $1 billion (€916.4 million) Senior Notes, comprising $600 million in 10-year notes and $400 million in 30-year notes.

CRH had not accessed US dollar bond markets since May 2015, when it priced a $1.75 billion dual-tranche 10 and 30 year transaction. But with conditions generally buoyant and notes maturing in 2018 the company was actively monitoring new issue conditions and was considering a contemporaneous 'any-and-all' cash tender for an imminent 8.125 per cent US$ maturity.

Despite heavy supply during March and the beginning of April, new US$ transactions were receiving a positive reception, with issuers achieving low single-digit new issue concessions across maturities.



In the two-weeks prior to CRH’s new issue announcement there was a slowdown in primary market activity due to a combination of political events, public holidays and the start of the corporate earnings season. On 2nd May 2017 a 'go/no-go' call was held at 8:30am EST and against a stable market backdrop the decision was made to press ahead with the announcement of a US$ new issue.

The choreography required the loan maturity to be announced first, and once this was visible, the new issue announcement followed. The backdrop was further aided by Moody’s releasing an upgrade on CRH to Baa1, stable. Initial Price Thoughts on the new issue were announced as T+140bp on the 10-year and T+170bp on the 30-year and the orderbook grew quickly, reaching a total of about $6.5 billion by 11:30am EST.

Given the strength, high quality, and size of demand, guidance was tightened to T+125bp (+/-5) and T+150 (+/-5), respectively, which did result in some investors reducing or pulling orders. However, the final orderbook was supportive of pricing at the tight-ends of the ranges, comprising 29 orders of $50 million or more, with seven of $100 million or greater. Final terms were set at T+120bp for the $600 million 10-year notes and T+145bp for the $400 million 30-year notes.

Citi and NatWest Markets were Active Book Runners on the US$ new issuance and Citi was Co-Ordinating Dealer Manager and Docs Bank on the 'any-and-all' tender offer on the 2018 notes that ran alongside the issuance.

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