CNO Aims for Low 6%s

Brazil’s Odebrecht is heard whispering a 6.0%-6.5% yield for an expected $500m 2023 bond likely to price in the next few days. Investors say such a price is attractive versus the builder’s outstanding 2020 bond. The BBB minus/BB bond amortizes in two equal installments in 2022 and 2023. Odebrecht is raising funds for a tender offer that it launched on Monday. It is offering to buy any and all of its outstanding 9.625% of 2014, 7.500% of 2017, and 7.000% of 2020 bonds for cash. It would pay holders of the $200m in outstanding 2014 bonds $1,190 per $1,000. Holders of $400m in outstanding 2017 would get $1,110 per $1,000, and holders of the $500m outstanding in 2020s would receive $1,097.50 per $1,000.00. The offer is subject to getting financing for the operation, and CNO reserves the right to cancel the 2020 offer if the combined acceptance from the 2014s and 2017s tops $500m. BAML and HSBC are managing the offer and the new sale.