The Central American Bottling Corporation (CBC), a major bottler and distributor for drinks giants PepsiCo and Ambev, will look to finance a tender offer for its $700m of 5.75% 2027s with a new bond issue.
It was only 18 months ago that Ba2/BB+ rated CBC added $200m to its 2027s, but the issuer has seen an opportunity to further push its debt maturities and has launched a buyback for all the bonds outstanding.
Citi and JP Morgan, who led that July 2020 tap, are dealer managers on the tender offer, under which bondholders can sell their notes at 102.875 cents on the dollar if they participate before the early-bird deadline of 5pm New York time on January 19. Any latecomers will be able to tender at 99.875 cents on the dollar before the expiry date of February 2.
The tender offer is subject to CBC meeting the financing condition, which it plans to do with the offering of new bonds. Investors that participate in the tender offer may receive priority at allocation of the new issue.
According to data from MarketAxess, CBC’s 2027s traded at around 102.70 on Friday, a yield of 4.8% and in line with where they were trading before the tender was announced.
Fitch had placed CBC on negative outlook in October 2019, blaming a slower than forecast deleveraging. But the rating agency returned the issuer to stable outlook last April, citing a “recovery of CBC’s operating performance in 2021-2022 that is expected to lead to gradual improvement in its leverage metrics”. Fitch expects CBC’s net debt to fall to 2.2 times this year, from 2.7 times at the end of 2020.
CBC has a leading position in the fizzy drink market in Jamaica, and significant shares in other main markets such as Guatemala, Ecuador and Puerto Rico, according to Fitch.