Building materials group CRH plans a $750 million (€830 million) bond issue which will be used to refinance some of its existing debt. CRH has given a mandate to investment banks JP Morgan and Schroder Salomon Smith Barney to manage the issue of senior unsecured notes and the fundraising should begin after investor presentations in the US and UK.
The proposed note issue has been given a Baa1 rating by Moody's and a BBB+ rating from Standard & Poor's. In a statement, S&P said the rating reflected CRH's strong market position, the diversification of its assets across products, regions and end-users, and the group's solid profitability and cash flow generation.
After a €1.1 billion rights issue earlier this year, analysts believe this earlier fundraising will reduce CRH's net debt at the end of December to around €1.6 billion. S&P's assessment also emphasised the cyclicality of CRH's business is mitigated by the diversity of its sales, where 40 per cent is in the residential sector, 32 per cent in non-residential and 28 per cent in infrastructure. S&P adds that the €1.1 billion rights issue has ensured CRH can continue with acquisition at the same level as recent years where the group has made several major acquisitions in Europe and the US. These have included €154 million earlier this year for Mount Hope Rock Products in the US, €425 million in late 2000 for the Swiss cement group Jura, €77 million for the Yule Catto roof lights business in the UK, and in 1999 €413 million for Thompson McCully in the US and Finncementti Rudus in Scandinavia and eastern Europe. CRH has also recently expanded into Israel.
