Published on 3/8/2021 in the Prospect News High Yield Daily.
New Issue: Alcoa Nederland prices $500 million eight-year notes at par to yield 4 1/8%
By Paul A. Harris
Portland, Ore., March 8 – Alcoa Nederland Holding BV priced a $500 million issue of eight-year senior notes (Ba1/BB+/BB+) at par to yield 4 1/8% in a Monday drive-by, according to market sources.
The yield printed at the tight end of yield talk in the 4¼% area. Initial guidance was in the mid-4% area.
The deal was heard to be playing to $2.3 billion of demand around 2:15 p.m. ET on Monday, a trader said.
Left lead bookrunner Morgan Stanley & Co. LLC will bill and deliver.
The Netherlands-based aluminum producer plans to use the proceeds plus cash on hand to contribute approximately $500 million to the U.S. defined benefit pension plans applicable to salaried and hourly employees, and to pay off its 6¾% senior notes due 2024.
| Issuer: | Alcoa Nederland Holding BV
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| Amount: | $500 million
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| Maturity: | March 31, 2029
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| Securities: | Senior notes
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| Left lead books: | Morgan Stanley & Co. LLC (bill and deliver)
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| Joint books: | Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BBVA Securities Inc., BNP Paribas Securities Corp., BofA Securities Inc., Banco Bradesco SA, Deutsche Bank Securities Inc., MUFG, PNC Capital Markets LLC, SMBC Nikko Securities America Inc., Truist
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| Co-managers | ANZ Securities Inc., BMO Capital Markets Corp., BNY Mellon Capital Markets LLC, ING Financial Markets LLC, Westpac
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| Coupon: | 4 1/8%
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| Price: | Par
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| Yield: | 4 1/8%
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| Spread: | 274 bps
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| First call: | Make-whole call at Treasuries plus 50 bps until Mar 31, 2024, then callable at 102.063
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| Equity clawback: | Up to 40% at 104.125 until March 31, 2024
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| Trade date: | March 8
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| Settlement date: | March 24
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| Ratings: | Moody's: Ba1
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| S&P: BB+
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| Fitch: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 4¼% area
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| Marketing: | Drive-by
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