By Paul A. Harris
Portland, Ore., June 18 – Multi-Color Corp. priced $1.39 billion of high-yield notes in two tranches on Tuesday, according to market sources.
An upsized $700 million amount of seven-year senior secured notes (B2/B) priced at par to yield 6¾%. The issue size increased from $650 million. The yield printed at the tight end of final yield talk in the 6 7/8% area. Earlier talk was in the 7% area. Initial talk on the secured notes was in the low 7% area.
A downsized $690 million amount of eight-year senior unsecured notes (Caa2/B-) priced at par to yield 10½%. The issue size decreased from $740 million. The yield printed at the wide end of the 10¼% to 10½% final yield talk, which was revised from 10% to 10½%.
Talk on the unsecured notes blew out from initial guidance in the low 9% area, according to market sources, who added that the unsecured paper also came with covenant changes.
The deal remained in the market over the past weekend as the unsecured tranche engendered pushback from investors objecting to the 10% to 10¼% price talk, as well as a covenant package that was perceived to afford too little protection for lenders, market sources say.
The issuing entity is LABL Escrow Issuer, LLC.
The Lab Escrow Issuer 6¾% secured notes due July 2026 were par bid, par ¼ offered late Tuesday afternoon, a trader said.
The secured tranche was heard to have been oversubscribed since early in the roadshow.
The 10½% unsecured notes were wrapped around par, the source added.
BofA Securities Inc. is the left bookrunner for the Rule 144A for life offering. Deutsche Bank Securities Inc., Barclays, BMO Securities, Credit Suisse Securities (USA) LLC, Houlihan Lokey and Morgan Stanley & Co. LLC are the joint bookrunners.
Proceeds will be used to help fund the buyout of the company by Platinum Equity LLC and fund the merger of Multi-Color with W/S Packaging Group, a portfolio company of Platinum Equity. The transaction is valued at $2.5 billion.
Multi-Color is a Cincinnati-based label maker. W/S Packaging is a Green Bay, Wis.-based provider of labels and packaging solutions.
| Issuer: | LABL Escrow Issuer, LLC, to be merged with and into LABL, Inc.
|
| Amount: | $1.39 billion
|
| Left bookrunner: | BofA Securities Inc.
|
| Joint bookrunners: | Deutsche Bank Securities Inc., Barclays, BMO Securities, Credit Suisse Securities (USA) LLC, Houlihan Lokey, Morgan Stanley & Co. LLC
|
| Trade date: | June 18
|
| Settlement date: | July 1
|
| Distribution: | Rule 144A for life
|
| Marketing: | Roadshow
|
|
|
| Senior secured notes
|
| Amount: | $700 million, increased from $650 million
|
| Maturity: | July 15, 2026
|
| Coupon: | 6¾%
|
| Price: | Par
|
| Yield: | 6¾%
|
| Spread: | 481 bps
|
| First call date: | July 15, 2022
|
| Ratings: | Moody's: B2
|
| S&P: B
|
| Price talk: | 6 7/8% area, revised from 7% area
|
|
|
| Senior unsecured notes
|
| Amount: | $690 million, decreased from $740 million
|
| Maturity: | July 15, 2027
|
| Coupon: | 10½%
|
| Price: | Par
|
| Yield: | 10½%
|
| Spread: | 850 bps
|
| First call date: | July 15, 2022
|
| Ratings: | Moody's: Caa2
|
| S&P: B-
|
| Price talk: | 10¼% to 10½%, revised from 10% to 10¼%
|
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