Published on 7/14/2014 in the Prospect News High Yield Daily.
New Issue: McGraw-Hill prices $400 million five-year PIK toggle notes at 99 to yield 8.748%
By Paul A. Harris
Portland, Ore., July 14 – McGraw-Hill Global Education Intermediate Holdings, LLC priced a $400 million issue of five-year senior PIK toggle notes (Caa1/B-/) at 99 to yield 8.748%, according to a syndicate source.
The notes have an 8½% cash coupon, which steps up by 75 basis points to 9¼% for PIK payments.
The reoffer price and coupon came on top of price talk.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Jefferies LLC, UBS Securities LLC, Nomura Securities International Inc. and BMO Capital Markets Corp. were the joint bookrunners.
The notes were issued by the parent company, MHGE Parent, LLC, and by subsidiary MHGE Parent Finance, Inc.
The New York-based provider of educational materials and learning solutions plans to use the proceeds to fund a dividend to its shareholders.
| Issuers: | MHGE Parent, LLC and MHGE Parent Finance, Inc. (McGraw-Hill Global Education Intermediate Holdings, LLC)
|
| Face amount: | $400 million
|
| Proceeds: | $396 million
|
| Maturity: | Aug. 1, 2019
|
| Securities: | Senior PIK toggle notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Jefferies LLC, UBS Securities LLC, Nomura Securities International Inc., BMO Capital Markets Corp.
|
| Co-manager: | Apollo Global Securities LLC
|
| Cash coupon: | 8½%
|
| PIK coupon: | 9¼%
|
| Price: | 99
|
| Yield: | 8.748%
|
| Spread: | 703 bps
|
| First call: | Callable after Aug. 1, 2015 at 102
|
| Equity clawback: | 100% at 102 in year one, 101 in year two, par in year three
|
| Change-of-control put: | 101%
|
| Trade date: | July 14
|
| Settlement date: | July 17
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8½% coupon at 99
|
| Marketing: | Quick to market
|
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