May 14, 2018 / 10:20 AM / a year ago

Israel Chemicals seeks to extend debt with 20-30 year bond sale

JERUSALEM, May 14 (Reuters) - Israel Chemicals (ICL) said on Monday it will offer bonds of 20 to 30-years as part of a plan to extend the maturity of its debt to take advantage of relatively low long-term interest rates.

ICL, the world’s sixth-largest producer of fertiliser ingredient potash, said it was launching a tender to buy back $800 million worth of 4.5 percent debt due in 2024 from bondholders. The bonds were sold in 2014.

The amount of bonds ICL will sell depends on how many bondholders respond to its offer but the company does not intend to increase its net debt.

ICL is offering a premium of about 2.25 points over current yields to entice bondholders to sell, it said.

Its bonds were up 0.1 percent in price at midsession to yield 2.11 percent.

“ICL is undertaking the tender offer in order to manage its overall funding level and optimize the maturity profile as part of ICL’s ongoing liability management,” it said.

“ICL intends to partially replace cash on hand or repay short-term borrowings and its revolving credit facility with the net proceeds from the concurrent offering of new notes.”

Earlier on Monday, Fitch rated the upcoming offering ‘BBB-‘. (Reporting by Steven Scheer)

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