The upcoming multi-currency bond offering by Tyco International (A/Baa1) will feature a sterling tranche--a first for the company, according to a banker on the deal. Tyco officials declined to say how large the issue would be, but analysts say it should eclipse the company's E600 million bonds of '07 and may approach E1 billion. The roadshow is set to begin today.
Steve Altman, analyst at Commerzbank Securities in New York, explains that Tyco will probably be able to get a longer maturity in the sterling market, because its investor base is more comfortable with longer-dated paper. Tyco will likely use the cash it raises for acquisitions as well as debt refinancing.
Tyco mandated Goldman Sachs and HSBC as joint bookrunners on the sterling portion, while Deutsche Bank and Schroder Salomon Smith Barney will manage the euro part of the deal. A banker at Goldman Sachs in London says the size of the bond is still to be determined, and there is no firm date for pricing. However, Commerzbank's Altman said Tyco could have some convertible debt put back this month and some of the cash raised would likely go towards financing that as well as acquisitions and debt refinancing.