By Andrew Willis
While non-investment grade debt issuers such as Bombardier (PINK:BDRXF) opted to wait for better days in credit markets, cancelling a planned $1-billion (U.S.) offering, security firm Garda did a pair of junk bond offerings.
Garda is a single-B rated credit – well under the triple-B threshold for investment grade – and sold debt denominated in both U.S. and Canadian dollars. The domestic bond sale is significant, as high yield issuers have traditionally financed in the deeper American market.
Garda raised C$250-million by selling seven year bonds with a 9.75 per cent interest rate. UBS Securities and Macquarie Group led the private placement, and the bonds yield a rich 700 basis points over the comparable U.S. government debt.
In Canada, TD Securities led a $75-million (Canadian) Garda offering that also sported a 9.75 per cent interest rate, or 712 basis points over the comparable government paper.