Rio Tinto surprises US high-grade market with 5-part deal

Fri Jun 14, 2013 9:20am EDT

June 14 (IFR) - Rio Tinto surprised the US high-grade market on Friday with a five-part deal that aims to take advantage of a rare issuance window following an overnight fall in US Treasury yields and stronger open for credit spreads.

The benchmark 10-year Treasury yield stood at 2.12% in early trade, a full 10 basis points below the level early Thursday when two issuers braved tricky conditions to bring small deals.

The five-part senior unsecured deal brought by Rio Tinto Finance (USA) comprises shorter duration bonds and floating-rate notes and offers chunky new issue concessions, according to bankers.

This is the perfect structure for an issue in these uncertain markets, they said.

The notes, expected to be sized at a total of USD2bn, are guaranteed by Rio Tinto plc and Rio Tinto Limited.

Morgan Stanley, BNP and JP Morgan are joint books.

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