By Paul A. Harris
St. Louis, Sept. 14 - E*Trade Financial Corp. completed a $450 million two-part high-yield bond transaction (B1/B) on Wednesday, according to a market source.
The New York City-based online brokerage priced a $100 million add-on to its 8% senior notes due June 15, 2011 at 103.45, resulting in a 7 1/8% yield. The yield came on the tight end of the 7¼% area price talk.
E*Trade also priced a new $350 million issue of eight-year senior notes at par to yield 7 3/8%, tight to the 7½% area price talk.
JP Morgan and Morgan Stanley were joint bookrunners for the Rule 144A with registration rights transaction.
Proceeds will be used to fund a portion of the acquisition of Jersey City, N.J., online brokerage Harrisdirect LLC from BMO Financial Group.
| Issuer: | E*Trade Financial Corp.
|
| Amount: | $450 million
|
| Bookrunners: | JP Morgan, Morgan Stanley
|
| Trade date: | Sept. 14
|
| Settlement date: | Sept. 19
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B
|
|
|
| Add-on
|
| Amount: | $100 million
|
| Maturity: | June 15, 2011
|
| Security description: | Add-on to the 8% senior notes
|
| Coupon: | 8%
|
| Price: | 103.45
|
| Yield: | 7 1/8%
|
| Call features: | Callable after June 15, 2008 at 104.0, 102.0, par on or after June 15, 2010
|
| Equity clawback: | Until June 15, 2007 for 35% at 108.0
|
| Price talk: | 7¼% area
|
|
|
| New senior notes
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| Amount: | $350 million
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| Maturity: | Sept. 15, 2013
|
| Coupon: | 7 3/8%
|
| Price: | Par
|
| Yield: | 7 3/8%
|
| Spread: | 332 basis points
|
| Call protection: | Four years
|
| Price talk: | 7½% area
|
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