Published on 7/13/2016 in the Prospect News High Yield Daily.
New Issue: Valvoline prices $375 million eight-year notes at par to yield 5½%
By Paul A. Harris
Portland, Ore., July 13 – Valvoline Inc. priced a $375 million issue of eight-year senior notes (Ba3/B+) at par to yield 5½% on Wednesday, according to a syndicate source.
The yield printed on top of final yield talk, which had been revised earlier Wednesday from talk of 5¾% to 6%.
Citigroup Global Markets Inc. was the left bookrunner for the deal that is related to Ashland Inc.’s spinoff of Valvoline.
BofA Merrill Lynch, Morgan Stanley & Co. LLC, Scotia Capital, Deutsche Bank Securities Inc., Goldman Sachs & Co. and J.P. Morgan Securities LLC are the joint bookrunners.
In addition to customary call features the deal also features special mandatory redemption provisions related to the spinoff and proposed IPO.
Proceeds will be used to repay Ashland bank debt.
The issuing entity will be Valvoline Finco Two LLC, which will merge with and into Valvoline, a Covington, Ky.-based specialty chemical company.
| Issuer: | Valvoline Finco Two LLC, to be merged with and into Valvoline Inc.
|
| Amount: | $375 million
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| Maturity: | July 15, 2024
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| Securities: | Senior notes
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| Left bookrunner: | Citigroup Global Markets Inc.
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| Joint bookrunners: | BofA Merrill Lynch, Morgan Stanley & Co. LLC, Scotia Capital, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC
|
| Senior co-managers: | PNC Capital Markets, U.S. Bancorp Investments Inc.
|
| Co-managers: | BB&T, BBVA, Citizens, Fifth Third Securities, KeyBanc Capital Markets, Mizuho Securities, MUFG, SunTrust Robinson Humphrey Inc., TD Securities
|
| Coupon: | 5½%
|
| Price: | Par
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| Yield: | 5½%
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| Spread: | 418 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until July 15, 2019, then callable at 104.125
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| Equity clawback: | 40% at 105.5 until July 15, 2019
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| Change-of-control put: | 101%
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| Trade date: | July 13
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| Settlement date: | July 20
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| Ratings: | Moody's: Ba3
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| S&P: B+
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| Distribution: | Rule 144A and Regulation S with registration rights
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| Price talk: | 5½%, revised from 5¾% to 6%
|
| Marketing: | Roadshow
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