Eldorado withdraws bond offering
Deteriorating market conditions blamed for $ 500- million turnabout
Eldorado Gold Corp., a Canadian producer of the metal that it mines in China and Greece, withdrew plans to sell $ 500 million of bonds maturing in 2020, citing “deteriorating” market conditions.
Eldorado decided the offering wouldn’t be in shareholders’ best interests “under the terms currently available,” chief executive Paul Wright said Friday. The Vancouver- based company announced the bond sale Nov. 12 and the securities were assigned a Ba3 rating by Moody’s Investors Service, three steps below investment grade.
Souring demand for high- yield bonds prompted Canadian jet maker Bombardier Inc. to pull a proposed $ 1- billion sale Thursday. High- yield bonds in the U. S. are losing 0.64 per cent this month, after posting 12.9 per cent returns this year through October, according to Bank of America Merrill Lynch index data.
The five largest junk- bond exchangetraded funds, which allow investors to speculate on the securities without owning them, have lost $ 1.97 billion of assets since Sept. 20, according to data compiled by Bloomberg.
“I’m not surprised about a deal getting cancelled,” Richard Kos, a Torontobased portfolio manager at Manulife Asset Management Ltd., said in an email. “The odds are that financing gets more expensive from here on.”
Eldorado shares rose 0.1 per cent to $ 14.12 in Toronto.