Tereos wraps upsized €350M offering of 5-year bonds tight of talk

French sugar-processing cooperative Tereos SCA completed its €350 million offering of five-year (non-call two-year) unsecured notes that priced at par for a 4.75% yield via a bookrunner group led by BNP Paribas (B&D).

Final pricing compares with talk given earlier Jan. 12 at 4.875% area and initial price thoughts in the 5% area. The transaction was upsized from €300 million, with investors highlighting a healthy new-issue concession against the company's outstanding debt and a supportive turnaround story, which offset concerns over risks associated with the cyclical nature of the commodities business. Investors noted that sugar prices are supportive and said the company's targets of a 5% EBIT margin and reductions of net leverage to below 3x and debt to below €2 billion by 2024 are realistic.

Proceeds from the deal, as well as additional proceeds from the upsize, will be used to support a partial tender offer for the company's €600 million of 4.125% unsecured bonds due 2023 and to repay other outstanding debt.

Ratings for the unsecured notes — which are to be issued via Tereos Finance Groupe 1 and guaranteed by Tereos SCA — are at B+ by both S&P Global Ratings and Fitch, with the company rated B+/BB- and stable.

Tereos processes agricultural raw materials into sugar, alcohol and starch. BNP Paribas, Natixis and Rabobank were global coordinators on the transaction, while Commerzbank, Credit Agricole CIB, CIC and ING are joint bookrunners.

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