Tim Hortons made its first foray into the bond market Thursday with the same efficiency as when it sells coffee out the drive thru window.
Just two weeks after announcing plans to sell debentures as part of a push to diversify its sources of capital, Tim Hortons rolled out a $200-million offering of seven-year bonds that pay 4.2 per cent interest. The issue was sold as a private placement to investors. It is rated single A, which is investment grade.
RBC Dominion Securities, the investment dealer that took Tim Horton public, and Scotia Capital led the transaction.
Tim Hortons may need cash to buy out the partner that runs its baking operation. The company announced two weeks ago that a Swiss food conglomerate, Aryzta AG, had triggered a shot gun provision that allows the partners to buy each other out. Negotations on the future of the jointly-owned baking unit are expected to play out over the rest of the year.
Tim Hortons was able to sell bonds at a time many non-investment grade issuers are struggling to move debt. Bloomberg reported Thursday that Viterra, the country's largest grain handler, delayed a $500-million debt offering.
At least 22 companies worldwide have postponed or withdrawn about $5 billion worth of debt sales since April 13, according to data compiled by Bloomberg.