By Mary-Katherine Stinson and Cristal Cody
Lexington, Ky., Feb. 14 – Jacobs Engineering Group Inc. sold $500 million of 5.9% sustainability-linked senior notes due March 1, 2033 (Baa2/BBB-), according to an FWP filed with the Securities and Exchange Commission.
The notes are fully guaranteed by Jacobs Solutions Inc.
The SEC-registered notes priced at 99.899 to yield 5.913%, or at a spread of 220 basis points over Treasuries. Price talk was in the Treasuries plus 250 bps area.
The notes feature a make-whole call at Treasuries plus 35 bps prior to Dec. 1, 2032. They feature a par call for the last three months prior to maturity.
Noteholders will be able to exercise put rights at 101 if a change of control occurs.
The notes will bear interest at a fixed rate and will be subject to two potential 12.5 bps step-ups, increasing the interest rate to 6.025% and 6.15%, respectively. The step-ups, scheduled to occur Sept. 1, 2028 and Sept. 1, 2030, are subject to adjustment based on the company’s performance against certain gender diversity and emissions performance targets.
BofA Securities, Inc., Wells Fargo Securities, LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and TD Securities (USA) LLC are the joint bookrunners for the offering, with BNP Paribas also acting as sustainability structuring agent.
Proceeds will be used to repay a portion of the company’s $2.25 billion long-term revolving credit agreement maturing February 2028. As of Dec. 30, 2022, approximately $1.6 billion was outstanding under the agreement, bearing interest at SOFR plus a margin ranging between 87.5 bps and 162.5 bps.
Jacobs is a Dallas-based engineering firm.
| Issuer: | Jacobs Engineering Group Inc.
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| Guarantor: | Jacobs Solutions Inc.
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| Amount: | $500 million
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| Issue: | Sustainability-linked notes
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| Maturity: | March 1, 2033
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| Bookrunners: | BofA Securities, Inc., Wells Fargo Securities, LLC, Morgan Stanley & Co. LLC, BNP Paribas Securities Corp. and TD Securities (USA) LLC
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| Co-managers: | HSBC Securities (USA) Inc., Scotia Capital (USA) Inc., U.S. Bancorp Investments, Inc., Barclays, Citizens Capital Markets, Inc., J.P. Morgan Securities LLC, NatWest Markets Securities Inc., RBC Capital Markets, LLC, Academy Securities, Inc., Comerica Securities, Inc., Huntington Securities, Inc., ICBC Standard Bank plc, Regions Securities LLC and Truist Securities, Inc.
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| Trustee: | U.S. Bank Trust Co., NA
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| Counsel to issuer: | Sullivan & Cromwell LLP
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| Counsel to bookrunners: | Mayer Brown LLP
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| Coupon: | 5.9%
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| Price: | 99.899
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| Yield: | 5.913%
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| Spread: | 220 bps over Treasuries
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| Call features: | Prior to Dec. 1, 2032 at a make-whole premium of Treasuries plus 35 bps; after at par
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| Change of control: | At 101
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| Trade date: | Feb. 13
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| Settlement date: | Feb. 16
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| Ratings: | Moody’s: Baa2
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| S&P: BBB-
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| Price talk: | Treasuries plus 250 bps area
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| Distribution: | SEC registered
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| Cusip: | 469814AA5
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