By Paul A. Harris
Portland, Ore., May 11 – HRG Group, Inc. priced a $300 million two-part tack-on deal in a quick-to-market Monday transaction, according to a syndicate source.
The deal saw a $10 million amount of face value shifted to the secured tranche from the unsecured tranche.
Both tack-ons came on top of price talk.
An upsized $160 million tack-on to the 7 7/8% senior secured notes due July 15, 2019 (Ba3/B+) priced at 104.5 to yield 6.011%. The tranche was upsized from $150 million. Proceeds will be used to fund working capital and general corporate purposes.
A downsized $140 million tack-on to the 7¾% senior unsecured notes due Jan. 15, 2022 (Caa1/CCC+) priced at 98.51 to yield 8.04%. The tranche was downsized from $150 million. Proceeds will be used to make an equity investment through one of its wholly owned subsidiaries in Spectrum Brands Holdings, Inc., a subsidiary of HRG, in connection with Spectrum Brands' acquisition of Armored AutoGroup Parent Inc.
Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Jefferies LLC were the joint bookrunners.
HRG is a New York-based diversified holding company.
Upon registration all tack-on notes will become fungible with existing notes.
| Issuer: | HRG Group, Inc.
|
| Amount: | $300 million
|
| Proceeds: | $305 million
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Jefferies LLC
|
| Trade date: | May 11
|
| Settlement date: | Both tack-ons settle with accrued interest on May 19
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Marketing: | Quick to market
|
| Fungibility: | Upon registration all tack-on notes will become fungible with existing notes
|
|
|
| Secured tranche
|
| Amount: | $160 million, increase from $150 million
|
| Proceeds: | $167 million
|
| Maturity: | July 15, 2019
|
| Security description: | Tack-on to 7 7/8% senior secured notes due July 15, 2019
|
| Coupon: | 7 7/8%
|
| Price: | 104.5
|
| Yield to worst: | 6.011%
|
| Spread: | 512 bps
|
| First call: | Jan. 15, 2016 at 105.906
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: B+
|
| Price talk: | 104.5
|
| Original issue: | $700 million priced at 99.362 to yield 8% in December 2012
|
| First tack-on: | $225 million priced at 101.5 to yield 7.474% in July 2013
|
| Second tack-on: | $100 million priced at 104.5 to yield 6.069% on April 9, 2015
|
| Total issue size: | $1,185,000,000
|
|
|
| Unsecured tranche
|
| Amount: | $140 million, decreased from $150 million
|
| Proceeds: | $138 million
|
| Maturity: | Jan. 15, 2022
|
| Security description: | Tack-on to 7¾% senior unsecured notes due Jan. 15, 2022
|
| Coupon: | 7¾%
|
| Price: | 98.51
|
| Yield to worst: | 8.04%
|
| Spread: | 610 bps
|
| First call: | Jan. 15, 2017 at 105.813
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Price talk: | 98.51
|
| Original issue: | $200 million priced at par in January 2014
|
| Previous tack-on: | $200 million priced at par to yield 7.746% on Sept. 8, 2014
|
| Total issue size: | $540 million
|
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