Published on 3/15/2013 in the Prospect News High Yield Daily.
New Issue: McGraw-Hill sells downsized $800 million 9¾% eight-year notes at 98.637 to yield 10%
By Paul A. Harris
Portland, Ore., March 15 - McGraw-Hill Global Education Holdings, LLC and McGraw-Hill Global Education Finance, Inc. priced a downsized $800 million issue of 9¾% first-lien senior secured notes due April 1, 2021 (B2/BB/) at 98.637 to yield 10% on Friday, according to a syndicate source.
The deal was downsized from $1 billion, after having previously been downsized from $1.05 billion. Proceeds were shifted to the credit facility, which was upsized to $1.05 billion from $850 million.
The yield printed at the wide end of the 9¾% to 10% yield talk.
In addition to the downsizing, a special call provision, which would have allowed the issuer to redeem up 10% of the notes annually at 103 during the non-call period, was eliminated.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Jefferies LLC, UBS Securities LLC, Nomura Securities International, Inc. and BMO Capital Markets Corp. were the joint bookrunners.
Proceeds will be used to fund the leveraged buyout of the company by Apollo Management.
McGraw-Hill Global Education is a New York-based digital learning company.
| Issuers: | McGraw-Hill Global Education Holdings, LLC and McGraw-Hill Global Education Finance, Inc.
|
| Face amount: | $800 million
|
| Proceeds: | $789.1 million
|
| Maturity: | April 1, 2021
|
| Securities: | Senior secured notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Jefferies LLC, UBS Securities LLC, Nomura Securities International, Inc., BMO Capital Markets Corp.
|
| Co-manager: | Apollo Global Securities, LLC
|
| Coupon: | 9¾%
|
| Price: | 98.637
|
| Yield: | 10%
|
| Spread: | 846 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until April 1, 2016, then callable at 107.313, 104.875, 102.438, par on and after April 1, 2019
|
| Equity clawback: | 35% at 109.75 until April 1, 2016
|
| Trade date: | March 15
|
| Settlement date: | March 22
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: BB
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
| Price talk: | 9¾% to 10%
|
| Marketing: | Roadshow
|
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