By Paul A. Harris
St. Louis, Nov. 29 - Momentive Performance Management, General Electric's advanced products business, priced a downsized and restructured $1.925 billion equivalent offering of high-yield notes in a four-part transaction on Wednesday, according to a market source.
The company priced $1.426 billion of eight-year senior notes (B3/B-) in three par-pricing tranches:
• A $765 million tranche of cash-pay notes priced to yield 9¾%, 12.5 basis points beyond the wide end of the 9½% area price talk;
• A $300 million tranche of senior toggle notes priced to yield 10 1/8%, on the wide end of talk that had the toggle notes pricing 25 to 37.5 basis points behind dollar-denominated cash-pay notes; and
• A €275 million tranche priced to yield 9%, on the tight end of the price talk that had the euro-denominated notes coming 75 to 100 basis points inside the dollar-denominated cash-pay notes.
Momentive also priced a $500 million tranche of 11½% 10-year senior subordinated notes (Caa2/CCC+) at 98.555 to yield 11¾%, 37.5 basis points beyond the wide end of price talk that had the subordinated notes coming 150 basis points behind the dollar-denominated senior cash-pay notes.
The subordinated note offering was downsized from $595 million equivalent, with a proposed euro-denominated tranche being withdrawn.
Total issuance was downsized to $1.925 billion from $1.950 billion. The remaining $25 million of proceeds will be raised in the bank loan market.
JP Morgan, GE Capital and UBS Investment Bank are joint bookrunners.
Proceeds will be used to fund Apollo Management, LP's leveraged buyout of General Electric Co.'s Advanced Materials business, which will be named Nautilus.
Nautilus is a Wilton, Conn.-based $2.5 billion supplier of silicone-based products, silanes, sealants, urethane additives and adhesives, and high-purity fused quartz and ceramics materials.
| Issuer: | Momentive Performance Management
|
| Amount: | $1.925 billion equivalent (decreased from $1.95 billion equivalent)
|
| Bookrunners: | JP Morgan, GE Capital, UBS Investment Bank
|
| Trade date: | Nov. 29
|
| Settlement date: | Dec. 1
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
|
|
| Senior notes
|
| Amount: | $1.426 billion equivalent
|
| Maturity: | Dec. 1, 2014
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
|
|
| Dollar-denominated cash-pay notes
|
| Amount: | $765 million
|
| Coupon: | 9¾%
|
| Price: | Par
|
| Yield: | 9¾%
|
| Spread: | 525 bps
|
| Call protection: | Four years
|
| Price talk: | 9½% area
|
|
|
| Toggle notes
|
| Amount: | $300 million
|
| Security description: | Senior toggle notes
|
| Coupon: | 10 1/8%
|
| Price: | Par
|
| Yield: | 10 1/8%
|
| Spread: | 562 bps
|
| Call protection: | Four years
|
| Price talk: | 25 to 37.5 bps behind dollar-denominated senior cash-pay notes
|
|
|
| Euro-denominated cash-pay notes
|
| Amount: | €275 million
|
| Coupon: | 9%
|
| Price: | Par
|
| Yield: | 9%
|
| Spread: | 535 bps
|
| Call protection: | Four years
|
| Price talk: | 75 to 100 bps inside the dollar-denominated cash-pay notes
|
|
|
| Senior subordinated notes
|
| Amount: | $500 million (decreased from $595 million equivalent, with proposed euro tranche withdrawn)
|
| Maturity: | Dec. 1, 2016
|
| Security description: | Senior subordinated notes
|
| Coupon: | 11½%
|
| Price: | 98.555
|
| Yield: | 11¾%
|
| Spread: | 725 bps
|
| Call protection: | Five years
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: CCC+
|
| Price talk: | 150 bps behind dollar-denominated senior cash-pay notes
|
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