Loxam out with €350M of 5-year notes

Loxam SAS is out with a €350 million offering of five-year (non-call two) secured notes, having scheduled a global investor call for 10:30 a.m. London time today. Roadshows will then run through Feb. 1 for pricing thereafter, via a group led by left-lead and physical bookrunner Credit Agricole CIB.

Proceeds are earmarked to take out the family-controlled equipment rental group's secured notes due 2022 and 2023. BNP Paribas and Deutsche Bank are both joint global coordinators alongside CA-CIB, while Barclays, BofA Securities, CM-CIC, J.P. Morgan, Natixis and Societe Generale are joint bookrunners.

Ratings are expected to emerge at B+ for both issue and issuer from S&P Global Ratings, banks say. Ratings upgraded the firm from B to B+ on positive outlook on May 7, 2021, citing stronger than expected full-2020 results despite the pandemic. Loxam's unsecured debt was also upgraded by one notch to B-.

Loxam was last seen in high yield when it priced a three-part offering in July 2019 split between €700 million of 3.25% secured notes due 2025, €450 million of 3.75% secured notes due 2026 and a €250 million 5.75% unsecured tranche due 2027. The company's secured rating was then BB-. From the 2019 deal, the 3.25% notes closed Jan. 28 at 98.369 for a yield of 3.839%, and the 3.75% notes closed at 99 for a yield of 3.994%, according to data compiled by S&P Global Market Intelligence. The firm's bonds did suffer during COVID-19 but found support following company action, including a covenant waiver from revolver lenders and a French state-backed loan.

As part of this week's refinancing, both bonds are being taken out at par and date from an offer of 3.5% notes put in place as part of a three-part offering in March 2017 and a separate 3.5% offer of notes from April 2016.

Loxam is the leading equipment rental firm in Europe and the fourth-largest worldwide. In a third-quarter results update published Nov. 23, 2021, the firm reported a 5.5% increase in quarterly revenue from the same period in 2020 of €555 million, EBITDA of €211 million, gross capital expenditure of €107 million and total liquidity of €602 million (excluding a €345 million undrawn revolver). Loxam also confirmed a €120 million partial redemption of its 6% 2025 subordinated notes. Net debt to Sept. 30, 2021, stood at €3.659 billion for a net leverage ratio of 4.7x.

In an update published with the bond note this morning, the firm said it estimates that consolidated revenue increased by 10% for the three months ended Dec. 31, 2021. Loxam added that activity in France is back to pre-pandemic levels, while the Nordic area received a boost from favorable weather conditions.