By Paul A. Harris
Portland, Ore., June 4 – L Brands, Inc. priced $1.25 billion of five-year notes in a two-part Thursday drive-by, according to market sources.
Bookrunners were J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BofA Securities Inc., HSBC Securities (USA) Inc., Wells Fargo Securities LLC, Barclays, ICBC Standard Bank plc, KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., Huntington Investment Co., PNC Capital Markets LLC, U.S. Bancorp Investments Inc., MUFG and Scotia Capital (USA) Inc.
The deal included $750 million of senior secured notes (Ba2/BB), which priced at par to yield 6 7/8%. The yield printed at the tight end of yield talk in the 7% area. Initial guidance was in the 8% area.
The deal also included $500 million of senior unsecured bullet notes (B2/B+), which priced at par to yield 9 3/8%. The yield printed at the tight end of yield talk in the 9½% area. Initial guidance was 10½% to 10¾%.
The overall deal was well oversubscribed, according to a trader, who said the secured tranche was heard to be playing to $7.9 billion of demand as of 12:30 p.m. ET on Thursday, at which time the unsecured tranche was playing to $4.4 billion of orders.
The Columbus, Ohio-based operator of specialty retail stores plans to use the proceeds to repurchase or redeem all of its 2021 notes, as well as to fund approximately $200 million of retirement plan obligations, and for general corporate purposes, including near-term maturity debt refinancing.
L Brands’ portfolio includes Bath & Body Works, Victoria’s Secret and PINK.
| Issuer: | L Brands, Inc.
|
| Amount: | $1.25 billion
|
| Maturity: | July 1, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BofA Securities Inc., HSBC Securities (USA) Inc., Wells Fargo Securities LLC, Barclays, ICBC Standard Bank plc, KeyBanc Capital Markets Inc., Mizuho Securities USA Inc., Huntington Investment Co., PNC Capital Markets LLC, U.S. Bancorp Investments Inc., MUFG and Scotia Capital (USA) Inc.
|
| Trade date: | June 4
|
| Settlement date: | June 18
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Drive-by
|
|
|
| Senior secured notes
|
| Amount: | $750 million
|
| Issue: | Senior secured notes
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Spread: | 647 bps
|
| Call protection: | Two years
|
| Ratings: | Moody's: Ba2
|
| S&P: BB
|
| Price talk: | 7% area
|
|
|
| Senior unsecured notes
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| Amount: | $500 million
|
| Issue: | Senior unsecured notes
|
| Coupon: | 9 3/8%
|
| Price: | Par
|
| Yield: | 9 3/8%
|
| Spread: | 897 bps
|
| Call protection: | Non-callable
|
| Ratings: | Moody's: B2
|
| S&P: B+
|
| Price talk: | 9½% area
|
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