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Case Study

Opportunistic bond refinancing at market-best pricing

Summary

A U.S.-based global manufacturer had EUR and USD bond maturities coming due. The company engaged Chatham to take an opportunistic approach to refinance upcoming maturities through the issuance of EUR and USD notes. Chatham provided specialized domain expertise, coupled with surge capacity to complement the company's internal execution effort.

Objectives and approach

  • The company's goals were to close the EUR and USD transactions with superior pricing on an accelerated timeline.
  • Chatham supported the company by developing workstreams, credit rating positioning, transaction marketing, pricing, and syndication strategies.
  • Chatham reviewed sequencing of the transaction to optimize price, size, and timing of the transaction execution process.

Chatham's role

  • Provide detailed execution support on comparable analysis, transaction structuring and documentation, while advising on optimizing titles and allocations of the underwriting group to manage bank relationships.
  • Investigate liability management strategies for effective use of proceeds in new issuances and analyze the sector to position borrowing entities effectively against comparable issuers.
  • Develop comprehensive investor targeting analysis for cross-holders, trading comparables, and syndication strategies with an eye towards tightening pricing.

Results

  • Updated the transaction sequencing to bifurcate the EUR and USD issuances, supporting the company in issuing the EUR notes first to remove anchor/overhang of the wider pricing in the USD market.
  • Updated the liability management strategy on the EUR use of proceeds to be a tender and buy back 2025 EUR notes at a discount, as opposed to the initial strategy of placing the proceeds in a deposit account.
  • Successfully up-sized the EUR issuance as the company achieved attractive pricing.

Ready to learn more?

Schedule a meeting with a member of our capital advisory team.

Disclaimers

Securities activities conducted by Chatham Financial Securities, member FINRA and SIPC.