Canadian toll road in C$800m bond sale

407 ETR issued the debt to refinance C$625m of senior notes coming due October 2010. The new debt will have $500m due in 2015 and $300m due in 2020.

407 ETR, the Canadian toll road owned by Cintra, Intoll and SNC-Lavalin, is refinancing $625 million ($605 million; €499 million) of its senior bonds.

407 International, 407 ETR’s parent company, said in a statement it has agreed to issue $800 million of new senior bonds that will pay off the old $625 million senior notes due October 2010 and fund general corporate purposes.

The new bonds will be issued in a tranche of $500 million due June 2015 and $300 million due 2020. The 2015 bonds will pay interest of 3.88 percent, according to the statement, while the 2020 bonds will pay interest of 4.99 percent.

Both tranches are being issued through the company’s $2 billion medium-term notes program.

The issuance comes at a time when 407 International is enjoying growing revenues. In April, the company announced revenues of $131.2 million for its first quarter of 2010, compared with $119.7 million for the same period in 2009. Earnings before interest, taxes, depreciation and amortization also grew, from $93.3 million for the first quarter of 2009 to $103.1 million for the first quarter of 2010.

Investment bank BMO Nesbitt Burns is leading a syndicate of six other banks in the transaction, including: RBC Dominion Securities, CIBC World Markets, Scotia Capital, National Bank Financial, TD Securities and Casgrain & Company.

The transaction is scheduled to close on or about 16 June.