By Paul A. Harris
Portland, Ore., Sept. 8 – IHO Verwaltungs GmbH priced an upsized €3.59 billion equivalent of senior secured PIK toggle notes (Ba1/B+) in six tranches on Thursday, according to a syndicate source.
The deal, which was upsized from €2.5 billion equivalent, featured €2.25 billion of euro-denominated notes in three tranches.
A €750 million tranche of five-year notes priced at par to yield 2¾%. The cash coupon is 2¾%. The PIK coupon is 3½%. The yield printed at the tight end of the 2¾% to 3% yield talk.
A €750 million tranche of seven-year notes priced at par to yield 3¼%. The cash coupon is 3¼%. The PIK coupon is 4%. The yield printed at the tight end of the 3¼% to 3½% yield talk.
A €750 million tranche of 10-year notes priced at par to yield 3¾%. The cash coupon is 3¾%. The PIK coupon is 4½%. The yield printed at the tight end of the 3¾% to 4% yield talk.
The transaction also included $1.5 billion of dollar-denominated notes in three tranches. All three tranches saw notes coming with yields that were 12.5 basis points inside of yield talk.
A $500 million tranche of five-year notes priced at par to yield 4 1/8%. The cash coupon is 4 1/8%. The PIK coupon is 4 7/8%. The yield talk was 4¼% to 4½%.
A $500 million tranche of seven-year notes priced at par to yield 4½%. The cash coupon is 4½%. The PIK coupon is 5¼%. The yield talk was 4 5/8% to 4 7/8%.
A $500 million tranche of 10-year notes priced at par to yield 4¾%. The cash coupon is 4¾%. The PIK coupon is 5½%. The yield talk was in the 5% area.
Global coordinator Citigroup will bill and deliver for the dollar-denominated notes.
Global coordinator Deutsche Bank will bill and deliver for the euro-denominated notes.
BofA Merrill Lynch and HSBC were bookrunners.
Pending registration, the company is named Schaeffler Verwaltung Zwei GmbH.
The Herzogenaurach, Germany-based supplier of automotive and industrial components plans to use the proceeds to repay IHO Holding bonds, including the make-whole premium, and partially prepay the Schaeffler AG loan note.
| Issuer: | IHO Verwaltungs GmBH (currently named Schaeffler Verwaltungs Zwei GmbH)
|
| Amount: | €3.59 billion equivalent, increased from €2.5 billion equivalent
|
| Securities: | Senior secured PIK toggle notes
|
| Trade date: | Sept. 8
|
| Settlement date: | Sept. 22
|
| Ratings: | Moody’s: Ba1
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Euro-denominated notes
|
| Amount: | €2.25 billion
|
| Global coordinators: | Deutsche Bank (bill and deliver), Citigroup
|
| Joint bookrunners: | BofA Merrill Lynch, HSBC
|
|
|
| Euro five-year notes
|
| Amount: | €750 million
|
| Maturity: | Sept. 15, 2021
|
| Cash coupon: | 2¾%
|
| PIK coupon: | 3½%
|
| Price: | Par
|
| Yield: | 2¾%
|
| First call: | Sept. 15, 2018 at 101.375
|
| Price talk: | 2¾% to 3%
|
|
|
| Euro seven-year notes
|
| Amount: | €750 million
|
| Maturity: | Sept. 15, 2023
|
| Cash coupon: | 3¼%
|
| PIK coupon: | 3¾%
|
| Price: | Par
|
| Yield: | 3¼%
|
| First call: | Sept. 15, 2019 at 101.625
|
| Price talk: | 3¼% to 3½%
|
|
|
| Euro 10-year notes
|
| Amount: | €750 million
|
| Maturity: | Sept. 15, 2026
|
| Cash coupon: | 3¾%
|
| PIK coupon: | 4½%
|
| Price: | Par
|
| Yield: | 3¾%
|
| First call: | Sept. 15, 2021 at 101.875
|
|
|
| Dollar-denominated notes
|
| Amount: | $1.5 billion
|
| Global coordinators: | Citigroup (bill and deliver), Deutsche Bank
|
| Joint bookrunners: | BofA Merrill Lynch, HSBC
|
|
|
| Dollar five-year notes
|
| Amount: | $500 million
|
| Maturity: | Sept. 15, 2021
|
| Cash coupon: | 4 1/8%
|
| PIK coupon: | 4 7/8%
|
| Price: | Par
|
| Yield: | 4 1/8%
|
| First call: | Sept. 15, 2018 at 102.063
|
| Price talk: | 4¼% to 4½%
|
|
|
| Dollar seven-year notes
|
| Amount: | $500 million
|
| Maturity: | Sept. 15, 2023
|
| Cash coupon: | 4½%
|
| PIK coupon: | 5¼%
|
| Price: | Par
|
| Yield: | 4½%
|
| First call: | Sept. 15, 2019 at 102.25
|
| Price talk: | 4 5/8% to 4 7/8%
|
|
|
| Dollar 10-year notes
|
| Amount: | $500 million
|
| Maturity: | Sept. 15, 2026
|
| Cash coupon: | 4¾%
|
| PIK coupon: | 5½%
|
| Price: | Par
|
| Yield: | 4¾%
|
| First call: | Sept. 15, 2021 at 102.375
|
| Price talk: | 5% area
|
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