Rubiales Hits DCM for Quick Takeout

Pacific Rubiales has raised $1.3bn in new bonds to replace acquisition debt, against a market backdrop improved by US Fed nominee Janet Yellen’s pro-QE stance. The Colombian-Canadian E&P operator got $4bn in orders for the 2019 NC3 and priced at 99.985 with a 5.375% coupon to yield 5.375%, the tight end of 5.500%-area guidance and earlier mid-5% initial price thoughts. The BB+/ BB+/Ba2 bond was heard trading up 0.25 points late Monday. The closest comps were Rubiales’ 2021, seen trading to yield 5.7%, and its 2023, trading to yield 6.1%. “Investors like the name because it has good management and a strong reputation. It is a strong double-B credit with potential of an upgrade,” says one European investor, noting attractive pricing for 5-year paper. The notes will be unconditionally guaranteed by Rubiales’ most significant operating subsidiaries. Proceeds from the bond, along with cash and a revolving credit facility, are going to finance the $1.52bn acquisition of fellow Colombian E&P operator Petrominerales, including the repayment of Petrominerales’ existing debt. Last month, Rubiales closed a $1.3bn 1-year bridge loan supporting the acquisition from Bank of America, Citi, HSBC and Itau. Monday’s bond will be governed by New York law and listed in Luxembourg. Bank of America Merrill Lynch was global coordinator with Citi, HSBC and Itau as joint books and BBVA and GMP as co-managers.