Arconic upsizes eight-year secured notes offering to $600 million; pricing Tuesday

By Paul A. Harris

Portland, Ore., Feb. 3 – Arconic Inc. upsized its offering of eight-year second-lien secured notes to $600 million from $400 million, shifting $200 million to the bonds from the concurrent term loan, market sources say.

Timing is accelerated. Dealers have targeted Tuesday for pricing the notes, to match the accelerated timing of the term loan. The notes had previously been expected to remain in the market until Thursday.

Pending official price talk, initial guidance had the Rule 144A and Regulation S for life notes coming to yield in the low 7% area, according to a bond trader.

Goldman Sachs & Co. LLC is the left bookrunner. J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the joint bookrunners.

ABN Amro Inc., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Securities Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, SMBC Nikko Securities America Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc. are the senior managers.

Citizens Capital Markets Inc., Huntington Capital Markets, ICBC Standard Bank plc, ING Financial Markets LLC, Nomura, Siebert Williams Shank & Co. LLC and Standard Chartered Bank are the co-managers.

The notes become callable after three years at par plus 50% of the coupon.

The Pittsburgh-based company plans to use the proceeds in connection with Arconic’s previously announced plan to separate into two stand-alone, publicly traded companies, and for general corporate purposes.

The issuing entity is Arconic Rolled Products Corp., which is a wholly owned subsidiary of Arconic, a producer of aluminum sheet and plate products for the aerospace, automotive, commercial transportation, brazing and industrial markets.

With Monday's tranche size shifts, the term loan is downsized to $600 million from $800 million.

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