By Paul A. Harris
Portland, Ore., June 28 – Exela Technologies priced an upsized $1 billion issue of six-year first priority senior secured notes (B3/B+) at par to yield 10% on Wednesday, according to a syndicate source.
The issue size was increased from $525 million as proceeds were shifted to it from a withdrawn $300 million offering of seven-year unsecured notes. Further funds came from a downsizing of the concurrent bank loan to $350 million from $525 million.
The yield printed 87.5 basis points beyond the wide end of final yield talk in the 9% area. That talk had been upwardly revised from earlier yield talk of 7¼% to 7½%.
RBC Capital Markets LLC is the left bookrunner for the notes offering. Credit Suisse Securities (USA) LLC, Natixis and KKR Capital Markets are the joint bookrunners.
Proceeds will be used for the creation of the company through the merger of Quinpario Acquisition Corp. 2, SourceHOV LLC and Novitex Holdings Inc, a syndicate source said on Tuesday.
Other funds for the roughly $2.8 billion merger will utilize cash from Quinpario, rollover equity and cash on hand at closing.
Shareholders of SourceHOV and Novitex are rolling 100% of the current equity and will be the majority shareholders of the combined company.
The combined company is expected to have about $1.5 billion in revenue in 2017.
Quinpario is a St. Louis-based special purpose acquisition company that completed its initial public offering in January 2015. SourceHOV, majority owned by HandsOn Global Management LLC, is an Irving, Texas-based provider of Transaction Processing Solutions and Enterprise Information Management solutions. Novitex is a West Stamford, Conn.-based provider of technology-driven managed services that is owned by Apollo Global Management LLC.
| Issuer: | Exela Intermediate LLC and Exela Finance Inc.
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| Amount: | $1 billion, upsized from $525 million
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| Maturity: | July 15, 2023
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| Securities: | First priority senior secured notes
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| Left bookrunner: | RBC
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| Joint bookrunners: | Credit Suisse, KKR, Natixis
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| Coupon: | 10%
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| Price: | Par
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| Yield: | 10%
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| Spread: | 803 bps
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| First call: | July 15, 2020 at 105
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| Trade date: | June 28
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| Settlement date: | July 12
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| Ratings: | Moody’s: B3
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| S&P: B
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 9% area, revised from 7¼% to 7½%
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| Marketing: | Roadshow
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