SMU Shops for 7% Handle

Chile’s Grupo SMU is out with high-7% to 8% initial price talk for what is expected to be a $300m senior unsecured 2020 NC4 bond sale, according to people familiar with the process. The B2/B borrower is expected to price as soon as today. Ba2/BB minus Peruvian retailer Maestro’s 2019 NC4 and Baa3/BBB minus Chilean supermarket operator Cencosud are seen as providing reference points. The notes are guaranteed by the four main operating entities of SMU which collectively represent 95% of consolidated Ebitda and 93% of SMU’s consolidated total assets. Proceeds will be used to refinance existing debt including syndicated loans and credit lines and to extend SMU’s maturity profile. BTG Pactual and Deutsche Bank are managing the sale. Though the issuer has used Chile’s local bond market, a sale would represent an international debut, according to Dealogic data.