By Paul A Harris
St. Louis, Dec. 17 - WMG Holdings Corp. priced about $700 million of high-yield notes (Caa2/B-) in three tranches Friday, according to a syndicate source.
The company sold $250 million of seven-year senior floating-rate notes at par to yield three month Libor plus 437.5 basis points, right on top of price talk.
WMG also sold $396.81 million face amount of 10-year senior discount notes at 63.002 to yield 9½%, at the tight end of the 9 5/8% area price talk. The senior discount notes pay a zero coupon for the first five years, at which point the coupon steps up to 9½%. The sale of the senior discount notes generated roughly $250 million of proceeds.
In addition, the company sold $200 million of 10-year senior floating-rate pay-in-kind notes at 98.00. The notes will pay interest at six-month Libor plus 700 basis points. The sale of the PIK notes generated $196 million of proceeds.
Goldman Sachs & Co., Banc of America Securities LLC and Deutsche Bank Securities ran the books for the Rule 144A issue.
Proceeds will be used to fund a dividend. The sponsors are Thomas H. Lee, Edgar Bronfman's Music Capital Partners, Bain Capital and Providence Equity Partners.
The issuer is a holding company for New York City-based Warner Music Group.
| Issuer: | WMG Holdings Corp.
|
| Amount: | $700 million approximate
|
| Bookrunners: | Goldman Sachs & Co., Banc of America Securities LLC, Deutsche Bank Securities
|
| Trade date: | Dec. 17
|
| Settlement date: | Dec. 23
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: B-
|
|
|
| Senior floating-rate notes
|
| Amount: | $250 million
|
| Maturity: | Dec. 15, 2011
|
| Coupon: | Three month Libor plus 437.5 basis points
|
| Price: | Par
|
| Yield: | Three month Libor plus 437.5 basis points
|
| Call features: | Callable on or after Dec. 15, 2006 at 102, 101 and par on and after Dec. 15, 2008
|
|
|
| Senior discount notes
|
| Face amount: | $396.81 million
|
| Proceeds: | $249,998,236
|
| Maturity: | Dec. 15, 2014
|
| Coupon: | 0% for five years, then 9½%
|
| Price: | 63.002
|
| Yield: | 9½%
|
| Spread: | 528 basis points
|
| Call features: | Callable on or after Dec. 15, 2009 at 104.75, 103.167, 101.583 and par on and after Dec. 15, 2012
|
| Equity clawback: | Until Dec. 15, 2007 for 35% at 109.50 accreted
|
|
|
| Senior floating-rate PIK notes
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| Face amount: | $200 million
|
| Proceeds: | $196 million
|
| Maturity: | Dec. 15, 2014
|
| Coupon: | Six-month Libor plus 700 basis points
|
| Price: | 98.00
|
| Call protection: | Non-callable before June 15, 2005
|
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