Tenneco starts roadshow for $1.75 billion secured notes due November 2028

By Paul A. Harris

Portland, Ore., Aug. 7 – Tenneco Inc. started a roadshow on Monday for a $1.75 billion offering of 8% senior secured notes due November 2028, according to market sources.

The offering represents a revival of efforts by dealers to replace bridge financing backing the buyout of the company by Apollo, which became hung up on dealer balance sheets due to market conditions late last year.

Initial price talk has the notes coming deeply discounted, at 85 to 86, resulting in a 12% all-in yield.

The Rule 144A and Regulation S notes become subject to their first call at 104 in November 2024.

BofA Securities, Inc. is the left bookrunner. Citigroup Global Markets Inc., Barclays, BNP Paribas Securities Corp., Jefferies & Co., RBC Capital Markets Corp., TD Securities (USA) LLC, Wells Fargo Securities LLC, Deutsche Bank Securities Inc., BMO Capital Markets Corp., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC and ING Financial Markets LLC are the joint bookrunners.

Proceeds plus cash on hand will be used to repay the bridge loan backing the buyout that was completed late November.

At that time, Pegasus Merger Co. and Tenneco Inc. were marketing $1 billion of six-year senior secured notes and a $1.4 billion six-year term loan B, which were eventually pulled from the market.

Tenneco was acquired in a transaction with an enterprise valuation of about $7.1 billion, including debt.

Tenneco is a Lake Forest, Ill.-based supplier of automotive products for original equipment and aftermarket customers.

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