MONTREAL: Gildan Activewear Inc is looking at selling debt for the first time in Canada and has set up meetings with fixed-income investors to discuss the potential sale, according to money managers briefed on the matter.
Chief executive officer (CEO) Glenn Chamandy is among executives set to address debt investors in Toronto and Montreal over the next week.
The roadshows start tomorrow. Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia are hosting the presentations.
Banks have told investors that Gildan is considering selling debt, according to money managers briefed on the matter.
On Tuesday, DBRS Morningstar said it assigned Gildan a BBB issuer rating with a stable trend, citing the company’s strong free cash flow generation and conservative financial management.
Gildan currently has US$2.1bil of debt, including revolving lines of credit, with about US$1.5bil of principal outstanding, according to materials distributed to money managers.
The potential sale could come at a time when corporate bond spreads in Canada are at their narrowest level against government bond benchmarks since late 2021, at a spread of nearly 1.05 percentage point, according to a Bloomberg index.
The rally echoes similar gains in the United States following the election of Donald Trump, which many believe will lead to corporate tax cuts and deregulation.
Meanwhile, Canadian investors are demanding more supply after a record year for issuance, with some transactions pricing at lower yields than existing debt, an unusual twist known as “negative concessions”. — Bloomberg
