(Bloomberg) — Alimentation Couche-Tard Inc., which recently completed the purchase of almost 2,200 gasoline stations in Europe from TotalEnergies SE, is getting over €10 billion ($10.8 billion) in orders for its first bond deal in the common currency in almost eight years to refinance acquisition debt.
Bond arrangers for the owner of the Circle K convenience-store chain garnered over €5.1 billion in bids for a planned sale of seven-year notes, according to people familiar with the matter, who asked not to be identified because they’re not authorized to speak publicly about the matter. The company, based in Laval, Quebec, is also getting another €5.1 billion in orders for a planned 12-year bond, said the people.
Couche-Tard, which plans to issue €1.35 billion of the notes, last sold euro-denominated bonds since May 2016, when it raised €750 million of 1.875% notes due 2026, data compiled by Bloomberg show. On Tuesday, the company also raised $1.5 billion of 10- and 30-year bonds in its first transaction in the dollar market in almost three years. Last month it priced in its home market C$500 million ($371 million) of 5-year bonds.
The company plans to use proceeds from the bond deals to repay outstanding debt, including amounts under the 2023 credit agreement facilities, according to people familiar with the matter. The company signed in December a $3.37 billion acquisition credit facility made up of six euro- and dollar-denominated portions maturing between 2024 and 2026, data compiled by Bloomberg show.
Couche-Tard is on track to price the seven-year debt at around 110 basis over the mid-swaps rate, compared to a spread of around 140 basis points discussed earlier Wednesday, according to the people familiar. The company’s new 12-year bonds will likely to be priced at a spread of around 140 basis points, which is 30 basis points tighter than in earlier talks, said the people.
The deals are aimed at enhancing the company’s capital structure and supporting its strategic vision, a representative for Couche-Tard said in emailed comments on the transactions this week.
–With assistance from Mathieu Dion.
(Adds demand for the transactions in first and second paragraphs.)
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