Published on 12/13/2012 in the Prospect News High Yield Daily.
New Issue: Cequel sells upsized $1 billion tap of 6 3/8% notes due 2020 at 103 to yield 5.751%
By Paul A. Harris
Portland, Ore., Dec. 13 - Cequel Communications Holdings I, LLC and Cequel Capital Corp. priced an upsized $1 billion add-on to their 6 3/8% senior notes due Sept. 15, 2020 (B3/B-/) at 103 to yield 5.751% on Thursday, according to a market source.
The deal was upsized from $750 million.
The reoffer price came in the middle of the 102.5 to 103.5 price talk. The yield printed in line with yield talk set in the 5¾% area.
J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC and RBC Capital Markets LLC were the joint bookrunners for the quick-to-market deal.
Proceeds, including those resulting from the $250 million upsizing of the deal, will be used to fund the tender for $500 million of the company's 8 5/8% senior notes due 2017, to make a capital contribution to Suddenlink that will be used to fully repay the revolver, to provide working capital and for general corporate purposes.
Cequel is a St. Louis-based cable operator.
| Issuers: | Cequel Communications Holdings I, LLC and Cequel Capital Corp.
|
| Face amount: | $1 billion
|
| Proceeds: | $1.03 billion
|
| Maturity: | Sept. 15, 2020
|
| Security description: | Add-on to 6 3/8% senior notes due Sept. 15, 2020
|
| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets LLC
|
| Co-managers: | Barclays, Goldman Sachs & Co., Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey Inc., UBS Securities LLC, Wells Fargo Securities LLC, US Bancorp Investments Inc.
|
| Coupon: | 6 3/8%
|
| Price: | 103
|
| Yield to maturity: | 5.751%
|
| Spread: | 489 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2015, then callable at 104.781, 103.188, 101.594, par on and after Sept. 15, 2018
|
| Equity clawback: | 40% at 106.375 until Sept. 15, 2015
|
| Change-of-control put: | 101%
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| Trade date: | Dec. 13
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| Settlement date: | Dec. 28 with accrued interest
|
| Ratings: | Moody's: B3
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| Standard & Poor's: B-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 102.5-103.5 with 5¾% area yield
|
| Marketing: | Quick to market
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| Original issue: | $500 million issue priced at par on Oct. 11, 2012
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| Total issue size: | $1.5 billion
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