thyssenkrupp tightens talk in €4.05 billion five-part notes offering; pricing Tuesday

By Paul A. Harris

Portland, Ore., June 30 – Germany-based elevator technology company thyssenkrupp Elevator tightened talk in all four fixed-rate tranches of its €4.05 billion equivalent five-part offering of high-yield notes on Tuesday, according to a syndicate source.

The offer comes in tranches of dollar-denominated and euro-denominated notes.

• A $1.67 billion (€1.5 billion equivalent) amount of senior secured notes due 2027 (B1/B-/B+), callable after three years at par plus 50% of the coupon, is talked at 5 3/8%, revised from earlier talk in the 5½% area. Initial guidance was in the mid-to-high 5% area;

• A $445 million (€400 million equivalent) amount of senior unsecured notes due 2028 (Caa1/CCC/CCC+), callable after three years at par plus 50% of the coupon, is talked at 7 5/8%, revised from 7¾% to 8%. Initial guidance was in the low-to-mid 8% area;

• A €1 billion of amount of senior secured notes due 2027 (B1/B/B+), callable after three years at par plus 50% of the coupon, is talked at 4 3/8%, revised from 4½% to 4¾%. The tranche was upsized by €250 million;

• Talk on the sole floating-rate tranche, a €500 of amount floating-rate senior notes due 2027 (Caa1/CCC/CCC+), callable after one year at 101, remains unchanged at Euribor plus 475 basis points and a 0% Euribor floor at 99.5. The floaters were downsized by €500 million; and

• A €650 million tranche of senior notes due 2028 (Caa1/expected CCC/CCC+), callable after three years at par plus 50% of the coupon, is talked at 6 5/8%, revised from 6¾% to 7%.

Books were scheduled to close mid-morning Tuesday, New York time.

The sizes of the dollar-denominated tranches were adjusted to reflect exchange rates: The dollar-denominated secured notes increased to $1.67 billion from $1.655 billion, while the dollar-denominated unsecured notes increased to $445 million from $440 million.

On Monday both tranches of secured notes were upsized by €250 million equivalent, while the unsecured floating-rate tranche was downsized by €500 million.

The company also 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.

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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