Published on 9/23/2020 in the Prospect News High Yield Daily.
New Issue: QTS sells upsized $500 million eight-year notes at par to yield 3 7/8%
By Paul A. Harris
Portland, Ore., Sept. 23 – QTS Realty Trust, Inc. priced an upsized $500 million issue of eight-year senior notes (Ba3/BB) at par to yield 3 7/8% in a Wednesday drive-by, according to market sources.
The issue size increased from $400 million.
The yield printed at the wide end of the 3¾% to 3 7/8% yield talk but tight to early guidance in the high 3% to 4% area.
Goldman Sachs & Co. LLC was the left bookrunner. Joint bookrunners were BMO Capital Markets Corp., Jefferies LLC, KeyBanc Capital Markets Inc., TD Securities (USA) LLC, Truist Securities Inc., BofA Securities Inc., Capital One Securities Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., Regions Securities LLC, Stifel Nicolaus & Co. Inc., Santander Investment Securities Inc., Citizens Capital Markets Inc. and PNC Capital Markets LLC.
The Overland Park, Kan.-based provider of data center solutions plans to use the proceeds to pay down its revolver, which will subsequently be redrawn in order to fund the redemption of its 4¾% senior notes due 2025.
| Issuers: | QualityTech, LP and QTS Finance Corp.
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| Amount: | $500 million, increased from $400 million
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| Maturity: | Oct. 1, 2028
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| Securities: | Senior notes
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| Left bookrunner: | Goldman Sachs & Co. LLC
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| Joint bookrunners: | BMO Capital Markets Corp., Jefferies LLC, KeyBanc Capital Markets Inc., TD Securities (USA) LLC, Truist Securities Inc., BofA Securities Inc., Capital One Securities Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Morgan Stanley & Co. LLC, RBC Capital Markets Corp., Regions Securities LLC, Stifel Nicolaus & Co. Inc., Santander Investment Securities Inc., Citizens Capital Markets Inc. and PNC Capital Markets LLC
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| Coupon: | 3 7/8%
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| Price: | Par
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| Yield: | 3 7/8%
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| Spread: | 335 bps
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| Call protection: | Three years
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| Trade date: | Sept. 23
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| Settlement date: | Oct. 7
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| Ratings: | Moody's: Ba3
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| S&P: BB
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 3¾% to 3 7/8%
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| Marketing: | Drive-by
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