By Paul A. Harris
Portland, Ore., April 5 – Hess Midstream Partners LP priced a $400 million issue of 8.5-year senior notes (Ba2/BB+/BB+) at par to yield 5½% in a Tuesday drive-by, according to market sources.
The yield came at the tight end of the 5½% to 5¾% yield talk. Initial guidance was 5¾% to 6%.
The issuer telegraphed that it would not increase the deal size. And it ultimately played to $1.5 billion of demand, with some investors expressing the belief that at 5½% it was still reasonable – even a touch cheap – for a high-quality midstream name, a sellside source recounted.
The bonds were going out par ¼, par ½ offered, the sellsider added.
J.P. Morgan Securities LLC was at the left of a syndicate of bookrunners.
The issuing entity is Hess Midstream Operations LP, a consolidated subsidiary of Hess Midstream.
The Houston-based midstream company plans to use the proceeds to repay debt under its revolver that was used to finance the repurchase by the issuer of 13,559,322 class B units from affiliates of Hess Corp. and Global Infrastructure Partners.
| Issuer: | Hess Midstream Operations LP
|
| Amount: | $400 million
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| Tenor: | 8.5 years
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| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, MUFG, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC
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| Coupon: | 5½%
|
| Price: | Par
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| Yield: | 5½%
|
| Call protection: | 3.5 years
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| Trade date: | April 4
|
| Ratings: | Moody's: Ba2
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| S&P: BB+
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| Fitch: BB+
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 5½% to 5¾%
|
| Marketing: | Drive-by
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