First Student starts roadshow for $800 million senior secured notes; initial talk mid-4% area

By Paul A. Harris

Portland, Ore., July 8 – A roadshow started Thursday for the First Student Bidco Inc. and First Transit Parent Inc. $800 million offering of eight-year senior secured notes (Ba3/B+/BB+) backing the acquisition of First Student and First Transit by EQT Infrastructure, according to market sources.

The deal, which was set to kick off on a Thursday conference call with investors, is on a roadshow by means of one-on-one meetings between management and investors scheduled to take place through Monday.

Initial guidance has the deal coming to yield in the mid-4% area.

Left lead bookrunner Morgan Stanley & Co. LLC will bill and deliver. Barclays, BMO Capital Markets Corp., BNP Paribas Securities Corp., Citizens Capital Markets Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Mizuho Securities USA Inc., MUFG, RBC Capital Markets LLC, Stifel Nicolaus & Co. Inc. and TD Securities (USA) LLC are the joint bookrunners.

The notes become callable after three years at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

Proceeds plus proceeds from $2.015 billion of term loans will be used to help fund the buyout of the companies by EQT Infrastructure from FirstGroup plc for $4.6 billion.

The bonds are set to price early in the July 12 week, concurrently with the term loan.

First Student and First Transit are Cincinnati-based providers of student transportation services.

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