Durango Joins Junk Bond Fiesta

Mexican paper and packaging company Corporacion Durango plans to price today a $520m 2017 bond issue, which is talked at 10.5% area, according to bankers familiar with the transaction. The notes, rated B+ by S&P are non-call 5 and consolidate two tranches – the other a 5-year amortizer – that were being considered. Proceeds will be used to refinance debt. Durango is doing a tender offer for $419m in bonds and some loans, which is contingent on the cash raising. Merrill Lynch is the sole underwriter. Durango follows this week’s TGI (BB) and Grupo Senda (B+), the first sub-investment grade bond spree in many months.