New Issue: Medline downsizes to $7 billion, prices notes in secured and unsecured tranches

By Paul A. Harris

Portland, Ore., Sept. 30 – Medline Industries priced a downsized $7 billion amount of high-yield notes in two tranches on Thursday, according to market sources.

The overall size of the deal decreased from $7.7 billion.

The offering included an upsized $4.5 billion of 7.5-year senior secured notes (B1/B+/BB-) that priced at par to yield 3 7/8%, at the tight end of the 3 7/8% to 4% yield talk. Initial talk was in the low 4% area. The tranche size increased from $3.77 billion.

Medline's deal also included a downsized $2.5 billion of eight-year senior unsecured notes (Caa1/B-/B-) that priced at par to yield 5¼%, at the tight end of the 5¼% to 5½% yield talk. Initial talk was in the 6% area. The tranche size decreased from $4 billion.

The $1.5 billion downsize of the unsecured notes reflected a shift of those proceeds to the secured notes and loan. The loan upsized to $7.27 billion from $6 billion.

Goldman Sachs & Co. LLC was at the left of a syndicate of deal managers that also included J.P. Morgan Securities LLC, BofA Securities Inc., Barclays, Morgan Stanley & Co. LLC, MUFG, BMO Capital Markets Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Jefferies LLC, Macquarie Capital (USA) Inc., UBS Securities LLC, Wells Fargo Securities LLC, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc., Nomura Securities International Inc., RBC Capital Markets LLC, Santander Investment Securities Inc., Truist Securities Inc., ING Financial Markets LLC, Scotia Capital (USA) Inc., SG Americas Securities LLC, SMBC Nikko Securities America Inc. and TD Securities (USA) LLC.

Proceeds plus a $6 billion term loan, a €1 billion term loan, $2.23 billion other secured mortgage debt and an equity contribution will be used to help fund the buyout of Medline, a Northfield, Ill.-based manufacturer and distributor of health care supplies, by Blackstone Group, Carlyle Group and Hellman & Friedman LLC.

Issuer:	Mozart Debt Merger Sub Inc., to be merged with and into Medline Borrower, LP
Amount:	$7 billion, decreased from $7.7 billion
Bookrunners:	Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities Inc., Barclays, Morgan Stanley & Co. LLC, MUFG, BMO Capital Markets Corp., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Jefferies LLC, Macquarie Capital (USA) Inc., UBS Securities LLC, Wells Fargo Securities LLC, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc., Nomura Securities International Inc., RBC Capital Markets LLC, Santander Investment Securities Inc., Truist Securities Inc., ING Financial Markets LLC, Scotia Capital (USA) Inc., SG Americas Securities LLC, SMBC Nikko Securities America Inc. and TD Securities (USA) LLC
Co-managers:	Blackstone and TCG
Trade date:	Sept. 30
Settlement date:	Oct. 15
Distribution:	Rule 144A and Regulation S for life
Marketing:	Roadshow
Senior secured notes
Amount:	$4.5 billion, increased from $3.77 billion
Maturity:	April 1, 2029
Securities:	Senior secured notes
Coupon:	3 7/8%
Price:	Par
Yield:	3 7/8%
Spread:	251 bps
First call:	Oct. 1, 2024 at 101.93
Ratings:	Moody's: B1
	S&P: B+
	Fitch: BB-
Price talk:	3 7/8% to 4%
Bill and deliver:	JPMorgan
Senior unsecured notes
Amount:	$2.5 billion, decreased from $4 billion
Maturity:	Oct. 1, 2029
Securities:	Senior unsecured notes
Coupon:	5¼%
Price:	Par
Yield:	5¼%
Spread:	390 bps
First call:	Oct. 1, 2024 at 102.625
Ratings:	Moody’s: Caa1
	S&P: B-
	Fitch: B-
Price talk:	5¼% to 5½%
Bill and deliver:	Goldman Sachs

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