Bank of America, JP Morgan and Morgan Stanley are leading a new deal and simultaneous tender offer for B2/B/B rated CSN, which is looking to continue the liquidity improvements achieved with a $1bn deal last year.
A $400m tap of its 2023s and a new $600m seven year bond back in April was larger and better received than expected, soothing investor concerns about looming maturities and gaining CSN rating upgrades.
Rocketing iron ore prices during the first half of 2019 also helped the Brazilian issuer to improve its cash position, and the company’s 7.625% 2026s sold nine months ago now trade at around 106.50 — or a yield of 6.08%.
Yet the company still has $433.6m outstanding under its 6.5% July 2020s, compared to a cash position R$2.6bn ($625m) as of September 2019.
“Following the issuance of its benchmark sized bond and refinancing […] its 2020 notes, the company will have more cushion in maintaining its liquidity and servicing obligations,” said Fitch on Friday.
Bond bankers expect CSN to issue on January 23, the day before its tender offer expires. Bondholders can tender the notes at 102 cents on the dollar before 5pm on January 24.