GEMS Education sets final talk for upsized $900 million seven-year secured notes in 7¼% area

By Paul A. Harris

Portland, Ore., July 30 – GEMS Education talked a revised and upsized $900 million offering of seven-year senior secured notes (B2/B/B+) in the 7¼% area on Tuesday, according to a syndicate source.

The tranche size increased from $500 million with the withdrawal of a $300 million equivalent tranche of euro-denominated notes. Prior to being withdrawn, the euro-denominated notes were talked to yield in the 5% area.

The overall size of the transaction grew to $900 million from $800 million equivalent.

The notes are expected to price on Tuesday.

Global coordinator Goldman Sachs International is the physical bookrunner. Credit Suisse Securities (Europe) Ltd. is also a global coordinator.

Citigroup Global Capital Markets Ltd., Emirates NBD Capital Ltd. and HSBC Bank plc are the joint bookrunners.

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

The issuing entities will be GEMS Menasa (Cayman) Ltd. and GEMS Education (Delaware) LLC.

The Dubai-based provider of private K-12 education plans to use the proceeds, along with proceeds from its term loan B, to pay off its existing senior facilities, as well as to finance the acquisition of Bellevue Education, to repurchase certain school leases in Qatar, to fund distributions to holding companies and shareholders and for general corporate purposes.

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