US issuance: Lafarge makes dollar debut
Building materials company Lafarge has become the first French issuer to issue an SEC-registered deal for five years. But despite the ease with which it did this it seems unlikely many will follow its example.
Lafarge highlighted the challenges and advantages of accessing the US bond market when it sold a $2 billion debut deal in July, split into $600 million, $800 million and $600 million tranches of, respectively, five, 10 and 30 years.
Once the benefits of the US market’s liquidity were indisputable but over the past few years the heightened regulatory oversight has reduced its attractions; at the same time the European investor base has deepened. Only the larger financial issuers are regularly crossing the Atlantic these days; Lafarge is a relatively unusual case.
“It’s a market where there is a very big level of liquidity but with the advantage vis-à-vis the euromarket that it offers for an issuer of our rating (triple B) maturities that we couldn’t find in Europe. As you can see we have issued five, 10 and 30 years,” says Patrice Tourlière, chief treasurer at Lafarge.
Lafarge was refinancing a bank facility following its offer for outstanding minority shares of Lafarge North America in April for $3.5 billion. It wanted to raise a significant amount of cash but also wanted to go further down the yield curve than it has managed before.