thyssenkrupp revises tranche sizes, sets talk in €4.05 billion equivalent notes offering

By Paul A. Harris

Portland, Ore., June 29 – Germany-based elevator technology company thyssenkrupp Elevator revised the tranches of its €4.05 billion equivalent five-part offering of high-yield notes on Monday, according to a syndicate source.

As before, the offer comes in tranches of dollar-denominated and euro-denominated notes.

Revised tranches are as follows:

• An upsized $1.655 billion (€1.5 billion equivalent) of senior secured notes due 2027 (B1/expected B/B+), callable after three years at par plus 50% of the coupon, with price talk in the 5½% area (initial guidance was in the mid-to-high 5% area), upsized by €250 million equivalent;

• Approximately $450 million (€400 million equivalent) of senior unsecured notes due 2028 (Caa1/expected CCC/CCC+), callable after three years at par plus 50% of the coupon, with price talk of 7¾% to 8% (initial guidance low-to-mid 8% area);

• An upsized €1 billion of senior secured notes due 2027 (B1/expected B/B+), callable after three years at par plus 50% of the coupon, with price talk of 4½% to 4¾% (upsized by €250 million);

• A downsized €500 of floating-rate senior notes due 2027 (Caa1/expected CCC/CCC+), callable after one year at 101, with price talk at Euribor plus 475 bps and a 0% Euribor floor at 99.5 (downsized by €500 million); and

• €650 million of senior notes due 2028 (Caa1/expected CCC/CCC+), callable after three years at par plus 50% of coupon, with price talk of 6¾% to 7%.

In addition, the company upsized its U.S. seven-year first-lien term loan B (B1/B/B+) by €500 million equivalent to $2.815 billion and eliminated plans for a €500 million term loan A.

Bond books close 10 a.m. ET on Tuesday.

Global coordinator Goldman Sachs & Co. LLC will bill and deliver for the dollar-denominated notes. Global coordinator Barclays will bill and deliver for the euro-denominated unsecured notes. Global coordinator Credit Suisse will bill and deliver for the euro-denominated secured notes.

Deutsche Bank, RBC and UBS are joint bookrunners.

Proceeds from the Rule 144A and Regulation S for life deal, together with senior term facilities, private senior notes and an equity contribution will be used to fund the buyout of the company by Advent International, Cinven and RAG-Stiftung.

The issuing entities will be Vertical Midco GmbH, Vertical U.S. Newco Inc. and Vertical Holdco GmbH.

The acquisition of thyssenkrupp, which is based in Essen, Germany, is expected to close by the end of the third quarter of 2020.

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