Published on 10/10/2014 in the Prospect News High Yield Daily.
New Issue: Dynegy prices $5.1 billion senior notes in three tranches
By Paul A. Harris
Portland, Ore., Oct. 10 – Dynegy Inc. priced a combined $5.1 billion of senior notes (B3/B+/) in three tranches on Friday, according to a syndicate source.
A restructured $2.1 billion tranche of five-year notes priced at par to yield 6¾%. The tranche was upsized from $2 billion. The maturity was decreased from 5.25 years. The yield printed on top of yield talk.
A $1.75 billion tranche of eight-year notes priced at par to yield 7 3/8%. The yield printed on top of yield talk. The announced size range of the tranche was $1.5 billion to $2 billion.
A $1.25 billion tranche of 10-year notes priced at par to yield 7 5/8%. The yield printed at the tight end of yield talk in the 7¾% area. The announce size range of the tranche was $1 billion to $1.5 billion.
Price talk in 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 were the joint bookrunners.
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.
| Issuers: | Dynegy Finance I, Inc. and Dynegy Finance II, Inc.
|
| Amount: | $5.1 billion
|
| Securities: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, Barclays, Credit Suisse Securities (USA) LLC, RBC Capital Markets, UBS Investment Bank
|
| Co-managers: | BNP Paribas Securities Corp., BofA Merrill Lynch, Credit Agricole CIB, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, MUFG, SunTrust Robinson Humphrey Inc.
|
| Trade date: | Oct. 10
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| Settlement date: | Oct. 27
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| Ratings: | Moody's: B3
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| Standard & Poor's: B+
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Five-year notes
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| Amount: | $2.1 billion, upsized from $2 billion
|
| Maturity: | Nov. 1, 2019, maturity decreased from 5.25 years
|
| Coupon: | 6¾%
|
| Price: | Par
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| Yield: | 6¾%
|
| Spread: | 511 bps
|
| First call: | May 1, 2019 at 103.375
|
| Price talk: | 6¾% area
|
|
|
| Eight-year notes
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| Amount: | $1.75 billion, range was $1.5 billion to $2 billion
|
| Maturity: | Nov. 1, 2022
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| Coupon: | 7 3/8%
|
| Price: | Par
|
| Yield: | 7 3/8%
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| Spread: | 523 bps
|
| First call: | Nov. 1, 2018 at 103.688
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| Price talk: | 7 3/8% area
|
|
|
| 10-year notes
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| Amount: | $1.25 billion, range was $1 billion to $1.5 billion
|
| Maturity: | Nov. 1, 2024
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| Coupon: | 7 5/8%
|
| Price: | Par
|
| Yield: | 7 5/8%
|
| Spread: | 531 bps
|
| First call: | Nov. 1, 2019 at 103.813
|
| Price talk: | 7¾% area
|
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