HRG to price $300 million two-part tack-on deal in Monday drive-by

By Paul A. Harris

Portland, Ore., May 11 – HRG Group, Inc. plans to price $300 million of tack-on deals on Monday trailing a mid-morning conference call with investors, according to a syndicate source.

The deal includes a $150 million tack-on to the 7 7/8% senior secured notes due July 15, 2019. The notes become callable after Jan. 15, 2016 at 105.906 and feature a 35% equity clawback until Jan. 15, 2016.

Proceeds will be used to fund working capital and general corporate purposes.

The original $700 million issue priced at 99.362 to yield 8% in December 2012. A previous $225 million tack-on priced at 101.5 to yield 7.474% in July 2013. A succeeding $100 million tack-on priced at 104.5 to yield 6.069% on April 9, 2015.

The Monday drive-by deal also features a $150 million tack-on to the 7¾% senior unsecured notes due Jan. 15, 2022, which become callable after Jan. 15, 2017 at 105.813 and feature a 35% equity clawback until Jan. 15, 2017.

Proceeds from the 7¾% tack-on will be used to make an equity investment in Spectrum Brands in connection with the AAG acquisition.

The original $200 million issue priced at par on Jan. 15, 2014. A previous $200 million tack-on priced at par to yield 7.746% on Sept. 8, 2014.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Jefferies LLC are the joint bookrunners for the Rule 144A and Regulation S with registration rights offering.

The notes in both tranches feature 101% poison puts.

The issuer is a diversified holding company.

Upon registration all tack-on notes will become fungible with existing notes.

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