By Andrew Willis
Utility TransAlta (TAC) locked down financing for its recent acquisition of Canadian Hydro Developers (CHDVF.PK) by selling $500 million (U.S.) of 6-year bonds.
The fixed income outing on Tuesday comes on the heels of a $412.5 million (Canadian) stock sale from TransAlta that closed early in November. Both financings are meant to rebuild the Calgary-based company's balance sheet, by replacing loans from Royal Bank of Canada (RY) that initially paid for the $1.6 billion acquisition of Canadian Hydro. That sum includes both the purchase price and the Canadian Hydro debt that TransAlta shouldered.
An investment grade borrower - its credit rating is triple-B - TransAlta sold notes with a 4.75% interest rate that come due in 2015. The debt was priced at 250 basis points over the comparable U.S. government bond, according to a research report on Tuesday from TD Waterhouse.
HSBC (HBC), RBC Dominion Securities and Royal Bank of Scotland (RBS) led the bond sale.
The equity sale earlier this month was led by RBC Dominion Securities, CIBC World Markets and Scotia Capital. And Goldman Sachs (GS) and RBC Dominion split the advisory mandate on TransAlta's takeover. So, for Royal Bank and its investment dealer units, this deal featured fee-generating involvement at every turn.
