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Dynegy stakes out tranche-size ranges and price talk in $5.1 billion senior notes offering
By Paul A. Harris
Portland, Ore., Oct. 10 – Dynegy Inc. set tranche sizes and price talk for its massive $5.1 billion three-part offering of senior notes (expected ratings B3/B+) on Friday morning, according to a syndicate source.
A $2 billion tranche of five-year notes, which come with 2.5 years of call protection, is talked to yield in the 6¾% area. The maturity of the notes decreased to five years from 5.25-years.
The middle-maturity tranche, which is comprised of eight-year notes, will be sized at $1.5 billion to $2 billion. The eight-year notes, which come with four years of call protection, are talked to yield in the 7 3/8% area.
The long-maturity tranche, which is comprised of 10-year notes, will be sized at $1 billion to $1.5 billion. The 10-year notes, which come with five years of call protection, are talked to yield in the 7¾% area.
Books close at noon ET on Friday, and the deal is set to price thereafter.
Price talk for each tranche came 25 basis points wider than earlier guidance, according to a trader, who added that the short-duration tranche had been guided in the 6½% area, the eight-year notes in the 7 1/8% area and the 10-year notes in the 7½% area.
Morgan Stanley & Co. LLC, Barclays, Credit Suisse Securities (USA) LLC, RBC Capital Markets and UBS Investment Bank are the joint bookrunners for the Rule 144A with registration rights and Regulation S deal.
BNP Paribas Securities Corp., BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, MUFG and SunTrust Robinson Humphrey Inc. are the co-managers.
The Houston-based energy company, issuing via special purpose vehicles Dynegy Finance I, Inc. and Dynegy Finance II, Inc., plans to use the proceeds to fund the Duke Merchant Energy and EquiPower Resources Corp. acquisitions.
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