By Paul A. Harris
Portland, Ore., Jan. 10 – In the first deal to clear the primary market since Nov. 29, Targa Resources Partners LP and Targa Resources Finance Corp. priced an upsized $1.5 billion of senior notes (Ba3/BB) in a quick-to-market late Thursday trade, according to market sources
The issuance included $750 million of 8.5-year notes that priced at par to yield 6½% and an upsized $750 million tranche of 10-year notes, which priced at par to yield 6 7/8%.
The deal doubled in size.
The offering kicked off as a single $750 million tranche of 8.5-year notes, subsequent to which a $500 million tranche of 10-year notes was added; the long tranche was ultimately upsized to $750 million from $500 million.
Demand was conspicuous, with more than $4 billion of orders in the book, a trader said, adding that allocations were expected to come well short of order sizes, a source said, adding that no formal price talk had circulated the market, heading into the Thursday close.
Initial price talk was in the high 6% area for both tranches.
BofA Merrill Lynch was the left bookrunner. Jefferies LLC, Wells Fargo Securities LLC, Capital One Securities Inc., Goldman Sachs & Co. LLC and TD Securities were the joint bookrunners.
The Houston-based energy midstream company plans to use the proceeds for general corporate purposes, including repayment of senior notes due 2019 or other senior notes, repayment of bank debt, and funding growth investments and acquisitions.
Targa's upsized deal was the first to clear the market since Mercer International Inc. priced $350 million of 7 3/8% senior notes due January 2025 on Nov. 29.
| Issuers: | Targa Resources Partners LP and Targa Resources Finance Corp.
|
| Amount: | $1.5 billion, increased from $1.25 billion after previously being increased from $750 million
|
| Securities: | Senior notes
|
| Left bookrunner: | BofA Merrill Lynch
|
| Joint bookrunners: | Jefferies LLC, Wells Fargo Securities LLC, Capital One Securities Inc., Goldman Sachs & Co. LLC, TD Securities
|
| Co-lead managers: | ABN Amro, BBVA Securities Inc., ING, MUFG, Scotia Capital, SMBC Nikko Securities America Inc.
|
| Co-managers: | BB&T Capital Markets, BMO Capital Markets Corp., CIBC World Markets Corp., Citizens Capital Markets Inc., Fifth Third Securities, US Bank
|
| Trade date: | Jan. 10
|
| Settlement date: | Jan. 17
|
| Ratings: | Moody's: Ba3
|
| S&P: BB
|
| Distribution: | Rule 144A with contingent registration rights
|
| Marketing: | Quick to market
|
|
|
| 8.5-year notes
|
| Amount: | $750 million
|
| Maturity: | July 15, 2027
|
| Coupon: | 6½%
|
| Price: | Par
|
| Yield: | 6½%
|
| Spread: | 381 bps
|
| Call protection: | 3.5 years
|
| Price talk: | 6½%
|
|
|
| 10-year notes
|
| Amount: | $750 million, increased from $500 million
|
| Maturity: | March 1, 2029
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Spread: | 415 bps
|
| Call protection: | Five years
|
| Price talk: | 6 7/8%
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
