Published on 10/5/2016 in the Prospect News High Yield Daily.
New Issue: Dynegy sells upsized $750 million eight-year notes at par to yield 8%
By Paul A. Harris
Portland, Ore., Oct. 5 – Dynegy Inc. priced an upsized $750 million issue of senior notes due Jan. 15, 2025 (B3/B+) at par to yield 8% on Wednesday, according to a syndicate source.
The issue size was increased from $500 million.
The yield printed at the tight end of yield talk in the 8 1/8% area. Initial guidance had the deal coming to yield 8% to 8¼%.
Morgan Stanley & Co. LLC, Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, MUFG, RBC Capital Markets and UBS Investment Bank are the joint bookrunners for the Rule 144A and Regulation S for life offering.
The Houston-based energy company plans to use the proceeds, together with proceeds from the sale of Dynegy's 50% stake in Elwood Energy, LLC, and cash on hand, to fund the Energy Capital Partners buyout and partially repay Dynegy’s tranche B-2 term loans.
| Issuer: | Dynegy Inc.
|
| Amount: | $750 million, increased from $500 million
|
| Maturity: | Jan. 15, 2025
|
| Securities: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, MUFG, RBC Capital Markets, UBS Investment Bank
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Spread: | 625 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until Jan. 15, 2020, then callable at 104
|
| Equity clawback: | 35% at 108 until Jan. 15, 2020
|
| Trade date: | Oct. 5
|
| Settlement date: | Oct. 11
|
| Ratings: | Moody's: B3
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8 1/8% area
|
| Marketing: | Quick to market
|
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