New Issue: McAfee prices downsized $2.02 billion 7 3/8% eight-year notes at par

By Paul A. Harris

Portland, Ore., Feb. 3 – Condor Merger Sub, Inc. (McAfee Corp.) priced a downsized $2.02 billion issue of eight-year senior notes (Caa2/CCC+) at par to yield 7 3/8% on Thursday, according to market sources.

The yield came in the middle of yield talk in the 7 3/8% area. Initial guidance was in the low-7% area.

The bond portion of the deal underwent two reductions in size. The unsecured tranche was decreased from $2.32 billion on Thursday. Earlier in the week the issuer withdrew from the market a proposed $1 billion offering of seven-year senior secured notes.

BofA Securities Inc. was the left bookrunner. Joint bookrunners were Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC, UBS Securities LLC, BMO Capital Markets Corp., KKR Capital Markets LLC, Macquarie Capital (USA) Inc., Mizuho Securities USA Inc., MUFG, Nomura Securities International Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp., CIBC World Markets Corp., Citizens Capital Markets LLC, Credit Agricole CIB, Fifth Third Securities Inc., IMI, KeyBanc Capital Markets Inc., Natixis Securities Americas LLC, Scotia Capital (USA) Inc., SG Americas Securities LLC, SMBC Nikko Securities America Inc., Standard Chartered Bank, Stifel Nicolaus & Co. Inc. and TD Securities (USA) LLC.

The $1.3 billion of proceeds, representing the total decrease from the initially planned amount of notes issuance, was shifted to a concurrent bank loan, which increased to $6.96 billion equivalent from $5.66 billion equivalent.

Proceeds from the unsecured notes and term loans plus a preferred stock offering and equity contributions from investors will be used to fund the acquisition of McAfee by an investor group led by Advent International Corp., Permira Advisers LLC, Crosspoint Capital Partners, Canada Pension Plan Investment Board, GIC Private Ltd. and Abu Dhabi Investment Authority, expected to close in first half of 2022.

Proceeds will also be used to repay substantially all debt of the company and its subsidiaries, and for general corporate purposes.

The issuing entity, Condor Merger Sub, will be merged with and into McAfee upon completion of the buyout.

McAfee is a San Jose, Calif.-based provider of online protection for consumers.

Issuer:	Condor Merger Sub, Inc., to be merged with and into McAfee Corp.
Amount:	$2.02 billion, downsized from $2.32 billion after having been previously downsized from $3.32 billion
Issue:	Senior notes
Maturity:	Feb. 15, 2030
Left bookrunner:	BofA Securities Inc.
Joint bookrunners:	Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Barclays, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., RBC Capital Markets LLC, UBS Securities LLC, BMO Capital Markets Corp., KKR Capital Markets LLC, Macquarie Capital (USA) Inc., Mizuho Securities USA Inc., MUFG, Nomura Securities International Inc., Wells Fargo Securities LLC, BNP Paribas Securities Corp., CIBC World Markets Corp., Citizens Capital Markets LLC, Credit Agricole CIB, Fifth Third Securities Inc., IMI, KeyBanc Capital Markets Inc., Natixis Securities Americas LLC, Scotia Capital (USA) Inc., SG Americas Securities LLC, SMBC Nikko Securities America Inc., Standard Chartered Bank, Stifel Nicolaus & Co. Inc. and TD Securities (USA) LLC
Coupon:	7 3/8%
Price:	Par
Yield:	7 3/8%
Spread:	559 bps
First call:	Feb. 15, 2025 at 103.688
Trade date:	Feb. 3
Settlement date:	Feb. 17
Ratings:	Moody's: Caa2
	S&P: CCC+
Distribution:	Rule 144A and Regulation S for life
Price talk:	7 3/8% area
Marketing:	Roadshow

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