JPMorgan puts finishing touches on MinRes’ $1.3b high-yield bond deal

afr.com:

JPMorgan’s debt capital bankers were expected to price a $US850 million ($1.3 billion) high-yield bond deal for Chris Ellison’s Mineral Resources overnight, after running a multi-country roadshow earlier this week.

Mineral Resources boss Chris Ellison. 

The five-year senior unsecured notes would be non-callable for the first two years and bankroll MinRes’ capital expenditure and other corporate spending.

Initial price guidance was for 9 per cent area, with investors expecting the deal to come in at slightly tighter than the guidance, at around 8.7 per cent. It was offered in the 144A US private placement market.

JPMorgan marketed the new issue widely, including to debt investors in Canada, the US, Japan, China, Taiwan and Hong Kong, after MinRes flagged it in its ASX filings on Tuesday. The Wall Street bank was the sole bookrunner, although HSBC was staffed alongside it as a joint lead manager.

At initial guidance, the new MinRes bond would be paying about 3.32 per cent over the US Treasury 2028 bond, which currently yields 5.68 per cent.

Rating agencies Moody’s and Fitch ascribed slightly different ratings to the bond at Ba3 and BB respectively. Ba3 is the third-highest in Moody’s 11 non-investment grade ranks.

This week’s deal follows a similar one from MinRes in April 2022, where it raised $US1.25 billion from the US private placement markets across five-year and eight-year tranches which priced at 8 per cent and 8.5 per cent respectively. The final pricing for both was at the tighter end of initial guidance.

Mineral Resources posted $4.8 billion revenue and $1.8 billion underlying EBITDA for the 2023 financial year, up 40 per cent and 71 per cent respectively. Its net debt was up 166 per cent to $1.9 billion net