7-Eleven kicks off mega bond sale to help finance Speedway purchase

[NEW YORK] 7-Eleven is marketing a potential US$10.95 billion bond offering, according to people familiar with the matter, in what would be the largest corporate dollar debt sale globally so far this year.

Proceeds would help finance Tokyo-based parent Seven & i Holdings' US$21 billion acquisition of Speedway gas stations in the US from Marathon Petroleum Corp, according to a company spokesman.

A US$10.95 billion issuance would be the largest in the corporate dollar bond market globally since a US$12 billion sale from Verizon Communications in November, data compiled by Bloomberg show. It would also add to the 350 billion yen (S$4.47 billion) that the convenience-store operator raised in a Japanese debt offering for the Speedway deal two months ago.

The proposed investment-grade notes were rated Baa2 by Moody's Investors Service and AA- by S&P Global Ratings.

Moody's this month downgraded 7-Eleven's issuer rating to Baa2 from Baa1, citing a potential increase in debt after the Speedway purchase. S&P said it's likely to lower 7-Eleven's, as well as parent Seven & i's credit ratings by as many as two notches because of added debt due to the acquisition.

Credit Suisse Group AG, Sumitomo Mitsui Banking Corp, BofA Securities, Citigroup and JPMorgan Chase & Co are managing the bond sale.

BLOOMBERG