By Paul Deckelman
New York, July 31 - Alcatel-Lucent USA Inc. priced $50 million of 8 7/8% senior notes due Jan. 1, 2020 (B3/CCC+) on Wednesday, according to high-yield syndicate sources.
The notes priced at par. The quickly shopped issue had been expected to price to yield around the 9% area, the sources said.
Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc. were the joint global coordinators for the Rule 144A/Regulation S for life deal, while Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. and UniCredit Bank AG were joint bookrunners on the transaction.
The notes are non-callable for the first three years after issue, other than a make-whole call at 50 basis points over Treasuries, and then are callable after that according to a schedule.
The bonds also feature a 3-year equity clawback for up to 35% of the issue at 108.875% and are putable at 101% of their face value plus accrued and unpaid interest in any change-of-control event.
The issuer is a wholly-owned subsidiary of Alcatel-Lucent SA, the Paris-based telecommunications equipment manufacturer formed by the 2006 merger of France's Alcatel and U.S.-based Lucent. It plans to use the proceeds from the bond sale for partial repayment of amounts outstanding under Alcatel-Lucent USA Inc.'s senior secured credit facilities.
The parent company said in a news release that the offering aims to extend the average maturity of the company's debt as part of its "shift plan" announced on June 19, under which, among other corporate goals, Alcatel-Lucent would engage in a €2 billion "reprofiling" of its debt between now and 2015 "by actively capitalizing on attractive international debt market opportunities." Alcatel-Lucent at that time also announced a further goal of reducing its debt by some €2 billion through further asset disposals or access to the equity markets in order to support its long-term strategic goals.
| Issuer: | Alcatel-Lucent USA Inc.
|
| Amount: | $500 million
|
| Description: | Senior notes
|
| Maturity: | Jan. 1, 2020
|
| Joint global coordinators: | Morgan Stanley & Co. LLC and Deutsche Bank Securities Inc.
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. and UniCredit Bank AG
|
| Coupon: | 8 7/8%
|
| Price: | Par
|
| Yield: | 8 7/8%
|
| Spread: | 701 bps vs 1.125% UST due 12/31/19
|
| Call protection: | Non-callable other than a make-whole call at T+50 bps prior to July 1, 2016, then callable at 104.438; callable at 102.219 beginning July 1, 2017 and at par beginning July 1, 2018
|
| Equity clawback: | For up to 35% of issue at 108.875, prior to July 1, 2016
|
| Change of control: | Putable at 101% of principal plus accrued interest
|
| Trade date: | July 31
|
| Settlement date: | Aug. 7 (T+5)
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 9% area
|
| Marketing: | Quick-to-market
|
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