New Issue: Tempur-Pedic sells upsized $375 million eight-year notes at par to yield 6 7/8%

By Paul A. Harris

Portland, Ore., Dec. 12 - Tempur-Pedic International Inc. priced an upsized $375 million issue of eight-year senior notes (B3/B+/) at par to yield 6 7/8% on Wednesday, according to a syndicate source.

The yield came 12.5 basis points tighter than the 7% to 7¼% yield talk.

Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds, along with proceeds from a new credit facility and cash on hand, will be used to help fund the acquisition of Sealy Corp. and repay substantially all of Sealy's and Tempur-Pedic's outstanding debt.

Tempur-Pedic is a Lexington, Ky.-based bedding manufacturer.

Issuer:	Tempur-Pedic International Inc.
Amount:	$375 million, increased from $350 million
Maturity:	Dec. 15, 2020
Bookrunners:	Bank of America Merrill Lynch, Barclays, J.P. Morgan Securities LLC, Wells Fargo Securities LLC
Co-manager:	Fifth Third Securities Inc.
Coupon:	6 7/8%
Price:	Par
Yield:	6 7/8%
Spread:	560 bps
First call:	Make-whole call at Treasuries plus 50 bps until Dec. 15, 2020, then callable at 103.438
Equity clawback:	35% at 106.875 until Dec. 15, 2015
Change-of-control put:	101%
Trade date:	Dec. 12
Settlement date:	Dec. 19
Ratings:	Moody's: B3
	Standard & Poor's: B+
Distribution:	Rule 144A with registration rights and Regulation S
Price talk:	7% to 7¼%
Marketing:	Roadshow

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