Published on 4/24/2015 in the Prospect News High Yield Daily.
New Issue: ZF Friedrichshafen prices $3.5 billion notes in three bullet tranches
By Paul A. Harris
Portland, Ore., April 24 – ZF Friedrichshafen AG priced $3.5 billion of non-callable senior notes (Ba2/BB) in three discounted tranches on Friday, according to a syndicate source.
A $1 billion tranche of 4% five-year notes priced at 99.44 to yield 4 1/8%. The yield printed at the tight end of yield talk in the 4¼% area. Early guidance was in low-to-mid 4s.
A $1 billion tranche of 4½% seven-year notes priced at 99.26 to yield 4 5/8%. The yield printed at the tight end of yield talk in the 4¾% area. Early guidance was in the high 4s.
And a $1.5 billion tranche of 4¾% 10-year notes priced at 99.02 to yield 4 7/8%. The yield printed at the tight end of yield talk in the 5% area. Early guidance was in the low 5s.
Citigroup Global Markets Inc. will bill and deliver and led a syndicate of banks that managed the Friday sale (see table below).
The notes in all tranches feature a 101 merger and acquisition call, as well as a special mandatory redemption at 101 if the acquisition is not closed before Jan. 4, 2016. In addition there is a clean-up call at par if less than 20% of the original principal remains outstanding.
The dollar-denominated three part deal comes on the heels of ZF Friedrichshafen’s sale of €2.25 billion of non-callable senior notes (Ba2/BB) in two tranches on April 20.
The issuer is a Friedrichshafen, Baden-Wuerttemberg, Germany-based auto parts manufacturer, which plans to use the proceeds to help fund its merger with Livonia, Mich.-based supplier of automotive systems, modules and components TRW Automotive Holdings Corp.
| Issuer: | ZF North America Capital, Inc.
|
| Face amount: | $3.5 billion
|
| Proceeds: | $3.45 billion
|
| Securities: | Senior notes
|
| Manager: | Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, BofA Merrill Lynch, Banca IMI SpA, Barclays, Bayerische Landesbank, BNP Paribas, Commerz Markets LLC, Credit Agricole CIB, Deutsche Bank Securities Inc., ING Financial Markets LLC, Landesbank Baden-Württemberg, Landesbank Hessen-Thüringen Girozentrale, MUFG, Mizuho Securities USA Inc., RBC Capital Markets LLC, RBS Securities Inc., Santander Investment Securities Inc., Skandinaviska Enskilda Banken AB, SMBC Nikko Capital Markets Ltd., UBS Securities LLC, UniCredit Bank AG
|
| Call protection: | Non-callable
|
| Trade date: | April 24
|
| Settlement date: | April 29
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Quick to market
|
|
|
| Five-year notes
|
| Amount: | $1 billion
|
| Maturity: | April 29, 2020
|
| Coupon: | 4%
|
| Price: | 99.44
|
| Yield: | 4 1/8%
|
| Spread: | 280 bps
|
| Price talk: | 4¼% area
|
|
|
| Seven-year notes
|
| Amount: | $1 billion
|
| Maturity: | April 29, 2022
|
| Coupon: | 4½%
|
| Price: | 99.26
|
| Yield: | 4 5/8%
|
| Spread: | 295 bps
|
| Price talk: | 4¾% area
|
|
|
| 10-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | April 29, 2025
|
| Coupon: | 4¾%
|
| Price: | 99.02
|
| Yield: | 4 7/8%
|
| Spread: | 295 bps
|
| Price talk: | 5% area
|
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