Madison IAQ ups two-part notes offering to $1.74 billion, sets talk; pricing Wednesday

By Paul A. Harris

Portland, Ore., June 15 – Madison IAQ, LLC upsized its two-part offering of high-yield notes to $1.735 billion from $1.485 billion and set price talk on Tuesday, according to a syndicate source.

An upsized $700 million tranche of seven-year senior secured notes (B1/B) is talk to yield in the 4¼% area. The tranche size increased from $600 million.

An upsized $1.035 billion tranche of eight-year senior unsecured notes (Caa1/CCC+) is talked to yield in the 6% area. The tranche was upsized from $885 million.

The Rule 144A and Regulation S for life deal is set to price on Wednesday.

Goldman Sachs & Co. LLC is the left bookrunner. Citigroup Global Markets Inc., CIBC World Markets Corp., Barclays, BofA Securities Inc., Capital One Securities Inc., HSBC Securities (USA) Inc., MUFG and Stifel Nicolaus & Co. Inc. are the joint bookrunners.

The notes in both tranches become callable after three years at par plus 50% of the respective coupons. The secured notes feature a special call provision, which would allow the issuer to redeem 10% of those notes annually at 103 during the non-call period.

Concurrently with the $250 million upsizing of the notes, the term loan was downsized by $100 million, to $1.825 billion from $1.925 billion.

The Chicago-based provider of indoor air quality solutions plans to use the proceeds from the debt and equity from Madison Industries to fund the acquisition of Nortek Air from Melrose Industries plc and refinance certain debt.

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