Published on 2/1/2019 in the Prospect News High Yield Daily.
New Issue: Dun & Bradstreet prices upsized $1.45 billion notes in two tranches
By Paul A. Harris
Portland, Ore., Feb. 1 – Dun & Bradstreet Corp. priced an upsized $1.45 billion of notes in two tranches on Friday, according to market sources.
The deal included an upsized $700 million tranche of 7.5-year senior secured notes (B2/B-/BB), which priced at par to yield 6 7/8%. The tranche increased from $500 million. The yield printed at the tight end of revised yield talk in the 7% area. Earlier talk was in the 7¼% area. Initial guidance was in the mid-7% area. BofA Merrill Lynch was the left bookrunner for the secured notes.
Dun & Bradstreet also priced a downsized $750 million tranche of eight-year senior unsecured notes (Caa2/CCC/B-) at par to yield 10¼%. The tranche size decreased from $850 million. The yield printed at the wide end of the 10% to 10¼% yield talk. Initial talk was in the 10¼% to 10½% area. Citigroup Global Markets Inc. was the left bookrunner for the unsecured notes tranche.
In addition to BofA Merrill Lynch and Citigroup, other bookrunners on both tranches were RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, MUFG and Mizuho Securities USA Inc.
Overall the two-part bond offering increased to $1.45 billion from $1.35 billion, while the bank loan decreased to $2.53 billion from $2.63 billion. Proceeds from the downsized loan and unsecured notes were shifted to the secured notes.
Both the secured notes tranche and the bank loan were heard to be playing to $3 billion of demand each on Friday morning, a trader said.
Proceeds will be used to finance the acquisition of Dun & Bradstreet by an investor group led by CC Capital, Bilcar LLC, Cannae Holdings and Thomas H. Lee Partners.
| Issuer: | Star Merger Sub, Inc., to be merged with and into Dun & Bradstreet Corp.
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| Amount: | $1.45 billion
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| Bookrunners: | BofA Merrill Lynch, Citigroup Global Markets Inc., RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, MUFG and Mizuho Securities USA Inc.
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| Co-managers: | Natixis, HSBC Securities, Jefferies, Macquarie, Wells Fargo Securities LLC, Citizens Capital Markets Inc., Houlihan Lokey and SMBC Nikko Securities America Inc.
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| Trade date: | Feb. 1
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| Settlement date: | Feb. 8
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Roadshow
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| Senior secured notes
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| Amount: | $700 million, increased from $500 million
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| Maturity: | Aug. 15, 2026
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| Left bookrunner: | BofA Merrill Lynch
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| Coupon: | 6 7/8%
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| Price: | Par
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| Yield: | 6 7/8%
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| Spread: | 426 bps
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| First call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2022, then callable at 103.438
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| Equity clawback: | 40% at 106.875 until Feb. 15, 2022
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| Ratings: | Moody's: B2
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| S&P: B-
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| Fitch: BB
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| Price talk: | 7% area, revised from 7¼% area
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| Senior unsecured notes
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| Amount: | $750 million, decreased from $850 million
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| Maturity: | Feb. 15, 2027
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| Left bookrunner: | Citigroup
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| Coupon: | 10¼%
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| Price: | Par
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| Yield: | 10¼%
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| Spread: | 767 bps
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| First call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2022, then callable at 105.125
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| Equity clawback: | 40% at 110.25 until Feb. 15, 2022
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| Ratings: | Moody's: Caa2
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| S&P: CCC
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| Fitch: B-
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| Price talk: | 10% to 10¼%
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