Published on 4/1/2015 in the Prospect News High Yield Daily.
New Issue: McGraw-Hill prices $100 million more 8½% PIK toggle notes at 99.101 to yield 8.748%
By Paul A. Harris
Portland, Ore., April 1 – McGraw-Hill Global Education Intermediate Holdings, LLC priced a $100 million tack-on to its senior PIK toggle notes due Aug. 1, 2019 (Caa1/B-) at 99.101 to yield 8.748% on Wednesday, according to a syndicate source.
The reoffer price came on top of price talk.
The notes pay a cash coupon of 8½%, which steps up by 75 basis points to 9¼% for PIK payments.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BMO Securities, Jefferies LLC, Nomura and UBS Investment Bank are the joint bookrunners for the Rule 144A and Regulation S for life tack-on.
The issuing entities are the parent company, MHGE Parent, LLC, and subsidiary MHGE Parent Finance, Inc.
The New York-based provider of educational materials and learning solutions plans to use the proceeds to fund a distribution to its shareholders.
| Issuers: | MHGE Parent, LLC and MHGE Parent Finance, Inc. (McGraw-Hill Global Education Intermediate Holdings, LLC)
|
| Face amount: | $100 million
|
| Proceeds: | $99 million
|
| Maturity: | Aug. 1, 2019
|
| Security description: | Tack on to 8½% senior PIK notes due Aug. 1, 2019
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, BMO Securities, Jefferies LLC, Nomura, UBS Investment Bank
|
| Cash coupon: | 8½%
|
| PIK coupon: | 9¼%
|
| Price: | 99.101
|
| Yield to worst: | 8.748%
|
| Spread: | 754 bps
|
| First call: | Callable after Aug. 1, 2015 at 101
|
| Equity clawback: | 100% at 102 in year one, 101 in year two, par in year three
|
| Change-of-control put: | 101%
|
| Trade date: | April 1
|
| Settlement date: | April 6 with accrued interest
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
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| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 99.101
|
| Marketing: | Quick to market
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| Original issue: | $400 million priced at 99 to yield 8.748% on July 14, 2014
|
| Fungibility: | Tack-on notes will be immediately fungible with original notes
|
| Total issue size: | $500 million
|
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