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Hamilton Sundstrand's $650 million bond deal plays to massive book, pricing Wednesday
By Paul A. Harris
Portland, Ore., Dec. 5 - Hamilton Sundstrand Industrial's downsized $650 million offering of eight-year senior notes (Caa1/CCC+) is going really well and playing to a book that contains $7 billion of orders, according to a trader.
The deal, which was downsized from $775 million on Tuesday, when $125 million of proceeds were shifted to the term loan, is officially talked at 7¾% to 8%.
However it appears to be coming together at 7¾%, said the trader, who added that initially yield discussions had taken place in the low 8% context.
Books are scheduled to close at noon ET on Wednesday.
The deal, which is in the market via special purpose vehicles Silver II Borrower SCA and Silver II US Holdings, LLC, is set to price Wednesday afternoon.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, RBC Capital Markets, Goldman Sachs & Co. and UBS Investment Bank are the joint bookrunners.
The Rule 144A for life notes become callable in three years at par plus 75% of the coupon. The notes feature a 40% equity clawback for the first three years and a 101% poison put.
Proceeds will be used to fund the leveraged buyout of the company by BC Partners and the Carlyle Group.
Along with the downsizing and price talk, covenant changes were also disclosed on Tuesday. The credit facility debt basket was increased by $125 million to $2,325,000,000. And the permitted liens ratio was increased to 4.75-times from 4.25-times.
Hamilton Sundstrand is a manufacturer of highly engineered, mission-critical pumps and compressors for the industrial, infrastructure and energy markets.
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