* MAF to use proceeds to help finance Carrefour purchase
* Will be first perpetual corporate hybrid issue from Gulf
* Co eyeing benchmark size, first call date in 2018
DUBAI, May 26 Dubai mall developer Majid Al
Futtaim Holding (MAF) is looking to raise at least $500 million
from the issue of a hybrid debt sale to finance its buyout of
French hypermarket chain Carrefour's stake in a
MAF, sole franchisee of Carrefour hypermarkets in the Middle
East, said last week it was buying out the company's 25 percent
stake in the joint venture for $680 million. [ID:ID:nL6N0E33T5]
In an investor presentation seen by Reuters, MAF said it had
enough liquidity at hand to finance the purchase.
"However, we are looking at a sub-ordinated security
issuance as a pro-active and conservative measure to preserve
debt capacity for organic growth, and to ensure no risk to
credit rating," the presentation said.
The issue size is expected to be benchmark, typically at
least $500 million for investment-grade borrowers.
The hybrid issue will contain both debt and equity
characteristics, and as a result, investors would expect to be
paid a higher interest rate for the additional risk, than for a
secured, senior bond issue.
The security will be ranked as deeply subordinated and
unsecured, and carry no fixed maturity date with an initial call
date after five years, in 2018, the presentation said.
MAF is rated BBB by Standard and Poor's and Fitch Ratings,
and is one of the only investment-grade privately held companies
in the region to issue globally-marketed bonds.
Goldman Sachs Group Inc and HSBC Holdings
are structuring advisers on the deal, and are joined by Bank of
America Corp, JPMorgan Chase & Co and Standard
Chartered as join lead managers.
Investor meetings kick off on May 26 and will cover Asia,
Europe and the Middle East.
On Saturday, Chief Executive Officer Iyad Malas said the
company foresaw capital investments of up to $1 billion this
year, not including the Carrefour purchase.
(Reporting by Rachna Uppal; Editing by Dinesh Nair)