CRH America, the wholly owned subsidiary of Irish building materials group CRH plc, has completed its second global bond offering, which will be used to partly finance CRH’s euro 646 million acquisition of Cementbouw Handel & Industrie (Cementbouw). The offering consists of $700 million 10-year notes, which were priced at a spread of 1.1 per cent above the 10-year US Treasury and have a coupon of 5.3 per cent. A $300 million 30-year tranche was priced at 1.3 per cent above the 30-year US Treasury and has a coupon of 6.4 per cent.
The issue was initially planned for $600 million but was increased to $1 billion due to strong investor demand. Over 100 institutional investors from Norht America and Europe participated in the transaction. The notes and guarantees will be unsecured and will rank equally with all other unsecured, un-subordinated obligations of CRH America, Inc. and CRH plc.
According to Harry Sheridan, finance director at CRH, CRH are particularly pleased with the transaction as it enabled CRH to extend its maturity debt profile to thirty years. CRH’s first global bond offering was in March 2003, when it raised $1 billion in ten-year notes.
The bond issue will be used partly to finance CRH’s euro 646 million acquisition in July this year of the distribution and building products operations of Dutch building materials group Cementbouw along with a euro 47 million 45 per cent stake in Cementbouw’s materials operations, and also for general corporate purposes which may include acquisitions. Year-to-date, CRH has spent over euro 1.2 billion on acquisitions and investments.
The bonds will be guaranteed by CRH plc and have been rated BBB+ by Standard & Poor’s (the same as S&P’s rating for CRH plc), A- by Fitch Ratings and Baa1 by Moodys. According to S&P, the ratings on CRH continue to reflect its strong market position in the cyclical and competitive global building materials industry; the exceptional diversification of its portfolio across products, regions and end users; and its solid profitability and cash-flow generation.
Bank of America Securities LLC, Citigroup and JP Morgan acted as joint bookrunners on the transaction. |
