(UPDATES with final pricing details in first three paragraphs, and Fitch commentary 5th-7th paragraphs)
NEW YORK -(Dow Jones)- Brazilian cement company Votorantim Cimentos completed a $500 million sale in the U.S. credit markets Thursday, according to a person familiar with the issue.
The 30-year bond deal was a reopening or, or addition to, a $750 million issue of 7.25% coupon bonds originally sold in April 2011.
The bonds were priced to yield 7.30%, or 432.2 basis points over the Treasury rate.
The anticipated ratings are Baa3 from Moody’s Investors Service and BBB from Standard & Poor’s.
Fitch Ratings issued a BBB-minus rating on Thursday, citing the company’s “long-term underlying fundamentals” in its industrial businesses.
Votorantim Industrial SA, which is guaranteeing the unsecured notes, is Brazil’s leading cement company with a 40% market share, Fitch said.
“The outlook for cement demand in Brazil is favorable in the near- and medium-term due to strong housing demand and major investments in infrastructure,” the ratings firm said. “Within the next three years, the company is expanding its Brazilian production capacity by approximately 10 million tons per year.”
The bonds, which were marketed in the Rule 144a private-placement market, feature a change of control put allowing investors to redeem them at 101 cents on the dollar in the event the company is acquired. Such provisions safeguard investors from a leveraged buyout.
Votorantim Cimentos is using the proceeds for general corporate purposes.
