Trinidad Cement shelves bond offering

Trinidad Cement dual-currency offering of speculative-grade notes has been postponed to await more favorable market conditions, according to a company statement. The deal was intended to target refinancing efforts and support general corporate purposes, and terms on an oversubscribed order book were not consistent with the company’s development strategies.

A $300 million tranche of seven-year (non-call four) secured notes was talked in the 9.5 per cent area, and the same went for a $25 million equivalent mirror tranche in Trinidad & Tobago dollars, or roughly TT$161.5 million, according to sources. As reported amid the investor pitch, there had been some changes to the covenant package, including elimination of a three-year, 103 special call feature, for up to 10% annually.

The company said the order book reached $389 million after the roadshow. The Trinidad & Tobago dollar tranche was important to not attract withholding tax and provide a hedge against foreign exchange risk, the company said.

Joint bookrunners were GMP Securities, Jamaica Money Market Brokers, and Byron Capital Markets, and issuance was to be under Rule 144A for life. Ratings had been assigned as B/B- (S&P/Fitch), with stable outlooks.

TCL Group is the leading producer of cement with eight operating companies in Trinidad, Barbados, Guyana, Jamaica and Anguilla. Its product lines include various types of cement, concrete, packaging, slings, and marketing. The company has a dominant market position in the CARICOM region with market shares in Trinidad & Tobago, Guyana, and Jamaica of 100%, 97%, and 85%, respectively.

Estimated CARICOM cement demand for 2014 is projected to grow approximately 1.5 per cent from 14Mt for 2013 to 14.2Mt driven primarily by the general overall economic improvement in the region. Regional prices are projected to increase by approximately three per cent.