Published on 11/9/2021 in the Prospect News Canadian Bonds Daily and Prospect News High Yield Daily.
New Issue: Open Text upsizes to $1.5 billion, prices senior notes in two parts
By Paul A. Harris
Portland, Ore., Nov. 9 – Open Text Corp. and Open Text Holdings, Inc. priced an upsized $1.5 billion two-part offering of senior notes (Ba2/BB) in a Tuesday drive-by, according to market sources.
The deal, which increased in size from $1 billion, came in an upsized $850 million tranche of eight-year notes from Open Text Corp. that priced at par to yield 3 7/8%. The yield printed at the tight end of the 3 7/8% to 4 1/8% yield talk. Initial guidance was in the 4% area.
The issuance also included an upsized $650 million tranche of 10-year notes from Open Text Holdings that priced at par to yield 4 1/8%, tight to the 4 1/8% to 4¼% yield talk. Initial guidance was in the 4¼% area.
Both tranches were originally sized at $500 million.
Joint bookrunner Barclays will bill and deliver. Citigroup, JPMorgan, BMO, BofA, Morgan Stanley, RBC, MUFG, Wells Fargo, CIBC, HSBC, NBC, PNC and Scotia were also bookrunners.
The Waterloo, Ont.-based developer of management software plans to use the proceeds to refinance its 5 7/8% senior notes due 2026 and fund cash to its balance sheet.
| Issuer: | Open Text
|
| Amount: | $1.5 billion, increased from $1 billion
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| Securities: | Senior notes
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| Bookrunners: | Barclays (bill and deliver), Citigroup, JPMorgan, BMO, BofA, Morgan Stanley, RBC, MUFG, Wells Fargo, CIBC, HSBC, NBC, PNC and Scotia
|
| Trade date: | Nov. 9
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| Settlement date: | Nov. 24
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| Ratings: | Moody's: Ba2
|
| S&P: BB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Drive-by
|
|
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| Eight-year notes
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| Issuer: | Open Text Corp.
|
| Amount: | $850 million, increased from $500 million
|
| Maturity: | Dec. 1, 2029
|
| Coupon: | 3 7/8%
|
| Price: | Par
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| Yield: | 3 7/8%
|
| Spread: | 255 bps
|
| First call: | Dec. 1, 2024 at 101.938
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| Price talk: | 3 7/8% to 4%
|
|
|
| 10-year notes
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| Issuer: | Open Text Holdings, Inc.
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| Amount: | $650 million, increased from $500 million
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| Maturity: | Dec. 1, 2031
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| Coupon: | 4 1/8%
|
| Price: | Par
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| Yield: | 4 1/8%
|
| Spread: | 269 bps
|
| First call: | Dec. 1, 2026 at 102.063
|
| Price talk: | 4 1/8% to 4¼%
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