By Paul A. Harris
Portland, Ore., Sept. 22 – Avantor, Inc. priced a downsized $4.1 billion equivalent amount of high-yield notes in three tranches on Friday, according to a syndicate source.
An upsized $1.5 billion tranche of seven-year senior secured notes (B2/B/BB) priced at par to yield 6%. The tranche size increased from $1,401,000,000. The yield printed at the wide end of the 5¾% to 6% yield talk.
A €500 million amount of seven-year senior secured notes (B2/B/BB) priced at par to yield 4¾%, at the tight end of the 4¾% to 5% price talk.
A downsized $2 billion amount of eight-year senior unsecured notes (Caa2/CCC+/B-) priced at par to yield 9%. The tranche size decreased from $2.25 billion. The yield printed at the wide end of the 8¾% to 9% yield talk. Fitch Ratings lowered its rating on the unsecured notes to B- from B.
The overall size of the three part deal decreased from $4.25 billion equivalent.
Earlier in the week the deal underwent extensive covenant changes.
Call protection was modified to include one extra year of premium protection for the secured and unsecured tranches.
All of the notes will be non-callable for three years, and then become callable at to-be-determined premiums in years four, five and six, becoming callable at par in year seven. The previous structure would have made the notes callable at par in year six.
Other revisions include the disposition of collateral, and the manner in which cash may be disbursed.
The official talk on the dollar-denominated tranches blew out from initial price talk, according to market sources.
The dollar-denominated first-lien notes, officially talked at 5¾% to 6%, had been in the market with initial talk of 5¼% to 5½%.
The unsecured notes, officially talked at 8¾% to 9%, had been introduced with initial price talk of 7 3/8% to 7 5/8%.
Goldman Sachs & Co. is the left lead. Barclays, J.P. Morgan Securities LLC and Jefferies LLC are also leads.
Proceeds, together with preferred equity financing of Vail Holdco, as well as $5.5 billion of senior secured credit facilities and cash on hand at VWR International LLC, will be used to finance the acquisition of VWR and fund a distribution to equity holders of Avantor and the issuer’s subsidiaries.
Avantor is a Center Valley, Pa.-based supplier of ultra-high-purity materials for the life sciences and advanced technology industries.
| Issuer: | Avantor, Inc.
|
| Amount: | $4.1 billion equivalent, decreased from $4.25 billion equivalent
|
| Left lead: | Goldman Sachs & Co.
|
| Leads: | Barclays, J.P. Morgan Securities LLC and Jefferies LLC
|
| Trade date: | Sept. 22
|
| Settlement date: | Oct. 2
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Dollar-denominated secured notes
|
| Amount: | $1.5 billion, decreased from $1,401,000,000
|
| Maturity: | Oct. 1, 2024
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Call protection: | Three years
|
| Ratings: | Moody's: B2
|
| S&P: B
|
| Fitch: BB
|
| Price talk: | 5¾% to 6%
|
|
|
| Euro-denominated secured notes
|
| Amount: | €500 million
|
| Maturity: | Oct. 1, 2024
|
| Coupon: | 4¾%
|
| Price: | Par
|
| Yield: | 4¾%
|
| Call protection: | Three years
|
| Ratings: | Moody's: B2
|
| S&P: B
|
| Fitch: BB
|
| Price talk: | 4¾% to 5%
|
|
|
| Unsecured notes
|
| Amount: | $2 billion, decreased from $2.25 billion
|
| Maturity: | Oct. 1, 2025
|
| Coupon: | 9%
|
| Price: | Par
|
| Yield: | 9%
|
| Call protection: | Three years
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Fitch: B-
|
| Price talk: | 8¾% to 9%
|
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