By Paul A. Harris
Portland, Ore., Jan. 29 – PetSmart LLC and PetSmart Finance Corp. priced $2.35 billion of high-yield notes in an accelerated Friday transaction which saw both tranches pricing through talk, according to market sources.
The deal included $1.2 billion of seven-year senior secured notes (B2/B) that priced at par to yield 4¾%, 25 basis points tighter than the 5% to 5¼% yield talk. Initial guidance was in the mid-5% area.
It also included $1.15 billion of eight-year senior unsecured notes (Caa1/CCC+) that priced at par to yield 7¾%, 12.5 bps inside of yield talk in the 8% area. Initial guidance was in the mid-8% area.
Dealers accelerated timing. The offer had previously been expected to remain in the market through Monday.
Joint bookrunner Barclays will bill and deliver. Additional bookrunners were J.P. Morgan Securities LLC, Apollo Global Securities LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Jefferies LLC, MUFG, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC.
The Phoenix-based pet specialty retailer plans to use the proceeds plus $1.3 billion of equity from its parent to refinance its existing term loan, its asset-based revolver, its 5 7/8% notes due 2025, its 8 7/8% notes due 2025 and its 7 1/8% notes due 2023.
| Issuers: | PetSmart LLC and PetSmart Finance Corp.
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| Amount: | $2.35 billion
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| Bookrunners | Barclays (bill and deliver), J.P. Morgan Securities LLC, Apollo Global Securities LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Jefferies LLC, MUFG, RBC Capital Markets LLC, UBS Securities LLC and Wells Fargo Securities LLC
|
| Trade date: | Jan. 29
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| Settlement date: | Feb. 12
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| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Secured notes
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| Amount: | $1.2 billion
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| Issue: | Senior secured notes
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| Maturity: | Feb. 15, 2028
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| Coupon: | 4¾%
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| Price: | Par
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| Yield: | 4¾%
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| Spread: | 398 bps
|
| Call protection: | Three years
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| Special call: | 10% of notes callable annually at 103 during non-call period
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| Ratings: | Moody’s: B2
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| S&P: B
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| Price talk: | 5% to 5¼%
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|
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| Unsecured notes
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| Amount: | $1.15 billion
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| Issue: | Senior notes
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| Maturity: | Feb. 15, 2029
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| Coupon: | 7¾%
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| Price: | Par
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| Yield: | 7¾%
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| Spread: | 685 bps
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| Call protection: | Three years
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| Ratings: | Moody's: Caa1
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| S&P: CCC+
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| Price talk: | 8% area
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