B1/B+ rated Arcor on Wednesday launched a tender offer for its outstanding 7.25% notes due 2017, offering bondholders 101.813 cents on the dollar to sell their paper.
Bondholders have until 5pm on July 1 to participate in the tender offer. There is $200m of 2017s outstanding. The bonds were originally sold in December 2010.
Arcor plans to finance the tender offer with a new seven or 10 year bond that is expected to raise between $300m-$350m.
Itaú, JP Morgan and Santander, who are managing Arcor’s tender offer, will also on Friday begin investor meetings with the company in New York and Los Angeles. The issuer — the best-rated in Argentina — will then travel to London and Boston for meetings on Monday before returning to New York for the final leg of its roadshow on Tuesday June 28.
Apart from buying back existing bonds, proceeds from the new bond will be used for working capital requirements, according to Fitch.
Arcor, founded in 1951, has a rating above the country ceiling because it exports to 120 countries, according to Fitch.
The company’s ratings reflect its “strong business position as a leading producer of confectionary and cookie products in Latin America supported by its strong market share and brand recognition and its solid financial profile underpinned by a conservative capital structure”, said the rating agency on Wednesday.
Córdoba-based Arcor has production facilities in Chile, Brazil, Mexico and Peru — which allowed it to partially mitigate the risks of foreign exchange controls during the previous Kirchner administration. The board approved the bond issuance earlier in June.
Including Arcor, at least five Argentine borrowers are considering issuing bonds in the short term. CCC+/B- rated Salta completed a roadshow with Citi and Deutsche Bank a week ago and could issue after the Brexit vote.
Citi and Credit Suisse are working with Celulosa Argentina on what would be the company’s first international deal, while Petrobras Argentina has mandated Citi and Deutsche for a $500m bond that will be used to finance a tender offer for outstanding 2017s.
Finally, the Province of Santa Fe is expected to debut in international markets after receiving a first time credit rating of B3/B.