By Paul A. Harris
Portland, Ore., June 27 – Allied Universal Holdco LLC priced an upsized $2.05 billion amount of high-yield notes in two tranches on Thursday, according to market sources.
The revised deal featured an upsized $1 billion tranche of seven-year senior secured notes (B3/B-/BB-), which priced at par to yield 6 5/8%.
The tranche size increased from $800 million after earlier being upsized from $500 million. Proceeds were shifted from the concurrent seven-year covenant-lite first-lien term loan, which was ultimately downsized to $2.02 billion from $2.52 billion.
The yield on the oversubscribed secured tranche came at the tight end of final yield talk in the 6¾% area and tighter than the 6¾% to 7% initial guidance.
Allied Universal also priced $1.05 billion of 9¾% eight-year senior unsecured notes (Caa2/CCC/CCC+) at 98.641 to yield 10%. The unsecured tranche came in line with talk that specified a coupon in the high 9% area, at a discount, to yield 10%. However, the unsecured paper came wide of initial talk that had it pricing 250 basis points to 300 bps behind the secured tranche.
The unsecured notes also underwent covenant changes primarily bearing upon how the company may disburse cash and incur additional debt.
Credit Suisse Securities (USA) LLC was the left lead bookrunner. Joint bookrunners were Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC, SG Americas Securities LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC.
The Conshohocken, Pa.-based facilities services provider plans to use the proceeds to pay off debt under its credit facilities and redeem its existing notes.
| Issuers: | Allied Universal Holdco LLC and Allied Universal Finance Corp.
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| Amount: | $2.05 billion, increased from $1.85 billion after earlier being increased from $1.55 billion
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| Lead left bookrunner: | Credit Suisse Securities (USA) LLC
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| Joint bookrunners: | Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. LLC, RBC Capital Markets LLC, SG Americas Securities LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Wells Fargo Securities LLC
|
| Co-managers: | ING and Raymond James & Associates Inc.
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| Trade date: | June 27
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| Settlement date: | July 12
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| Distribution: | Rule 144A and Regulation S
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| Marketing: | Roadshow
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|
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| Senior secured notes
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| Amount: | $1 billion, increased from $800 million after earlier being increased from $500 million
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| Maturity: | July 15, 2026
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| Coupon: | 6 5/8%
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| Price: | Par
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| Yield: | 6 5/8%
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| Spread: | 472 bps
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| First call: | July 15, 2022 at 103.313
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| Equity clawback: | 40% at 106.625 until July 15, 2022
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| Price talk: | 6¾% area
|
|
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| Senior unsecured notes
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| Amount: | $1.05 billion
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| Maturity: | July 15, 2027
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| Coupon: | 9¾%
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| Price: | 98.641
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| Yield: | 10%
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| Spread: | 804 bps
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| First call: | July 15, 2022 at 104.875
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| Equity clawback: | 40% at 109.75 until July 15, 2022
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| Price talk: | High 9% area coupon at a discount to yield 10%
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