Published on 11/6/2012 in the Prospect News High Yield Daily.
New Issue: E*Trade prices $1.31 billion of five-, seven-year senior notes
By Paul A. Harris
Portland, Ore., Nov. 6 - E*Trade Financial Corp. priced $1,305,000,000 of senior notes (existing ratings B2/B-) in two tranches on Tuesday, according to a syndicate source.
The transaction included a $505 million tranche of five-year notes, which priced at par to yield 6%. The yield printed on top of yield talk.
In addition, E*Trade priced an $800 million tranche of seven-year notes at par to yield 6 3/8%. The yield on the seven-year notes also came on top of yield talk, which had it coming 37.5 basis points behind the five-year notes.
Bank of America Merrill Lynch, Goldman Sachs & Co. and Morgan Stanley & Co. LLC were the joint bookrunners for the quick-to-market deal.
The New York-based financial services provider plans to use the proceeds to fully redeem its 7 7/8% senior notes due 2015 and its 12½% springing-lien notes due 2017.
| Issuer: | E*Trade Financial Corp.
|
| Amount: | $1,305,000,000
|
| Securities: | Senior notes
|
| Bookrunners: | Bank of America Merrill Lynch, Goldman Sachs & Co., Morgan Stanley & Co. LLC
|
| Change-of-control put: | 101%
|
| Trade date: | Nov. 6
|
| Settlement date: | Nov. 14
|
| Expected ratings: | Moody's: B2
|
| Standard & Poor's: B-
|
| Distribution: | SEC registered
|
| Marketing: | Quick to market
|
|
|
| Five-year notes
|
| Amount: | $505 million
|
| Maturity: | Nov. 15, 2017
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Spread: | 525 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Nov. 15, 2014, then callable at 103, 101.5, par on and after Nov. 15, 2016
|
| Equity clawback: | 35% at 106 until Nov. 15 2014
|
| Price talk: | 6% area
|
|
|
| Seven-year notes
|
| Amount: | $800 million
|
| Maturity: | Nov. 15, 2019
|
| Coupon: | 6 3/8%
|
| Price: | Par
|
| Yield: | 6 3/8%
|
| Spread: | 520 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Nov. 15, 2015, then callable at 104.781, 103.188, 101.594, par on and after Nov. 15, 2018
|
| Equity clawback: | 35% at 106.375 until Nov. 15, 2015
|
| Price talk: | 37.5 bps behind the five-year notes
|
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