Add a hot copper market to a hot high-yield market and the result is a hot bond deal, as Taseko Mines Ltd.'s $200-million (U.S.) bond offering Tuesday drew so much interest that it got done early at a better price than expected.
There were orders for $2-billion of bonds, so the company and its lead banker, Barclays Capital, decided to move up the pricing date on the 7.75 per cent notes, which come due in 2019. The bonds sold all over the world, with only a small allocation to Canada, said a person familiar with transaction.
Taseko is planning to use the money to fund development of its Gibraltar project. That involves building a concentrator and increasing the mine's copper production by a third.
High yield for smaller miners was once largely unheard of, but bankers it's now a space to watch as deals are being pitched all over. Tapping the willing high-yield market gives companies an alternative to straight equity financing, that dilutes shareholders, or an equity line from a bank.