Published on 8/15/2023 in the Prospect News Investment Grade Daily.
New Issue: Jacobs Engineering prices $600 million 6.35% senior notes due 2028
By Marisa Wong
Los Angeles, Aug. 15 – Jacobs Engineering Group Inc. priced $600 million of 6.35% five-year senior notes (Baa2/BBB-) guaranteed by parent Jacobs Solutions Inc., according to an FWP filing with the Securities and Exchange Commission.
The notes priced on Tuesday at 99.949 to yield 6.362%, or with a spread of 200 basis points over Treasuries.
The notes will have a make-whole call feature until one month before the maturity date, followed by a par call option. Noteholders will be able to exercise put rights at 101 if a change of control occurs.
BofA Securities, Inc., BNP Paribas Securities Corp., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, TD Securities (USA) LLC, HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc. are the joint bookrunners for the offering.
Proceeds will be used to repay a portion of the company’s $2.25 billion revolver due February 2028. As of June 30, about $806.15 million 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: | $600 million
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| Issue: | Senior notes
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| Maturity: | Aug. 18, 2028
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| Bookrunners: | BofA Securities, Inc., BNP Paribas Securities Corp., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, TD Securities (USA) LLC, HSBC Securities (USA) Inc. and Scotia Capital (USA) Inc.
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| Co-managers: | Barclays, Citizens JMP Securities, LLC, Morgan Stanley & Co. LLC, NatWest Markets Securities, Inc., RBC Capital Markets, LLC and U.S. Bancorp Investments, 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 underwriters: | Mayer Brown LLP
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| Coupon: | 6.35%
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| Price: | 99.949
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| Yield: | 6.362%
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| Spread: | Treasuries plus 200 bps
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| Call options: | Make-whole call at Treasuries plus 30 bps prior to July 18, 2028; par call after that
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| Put option: | At 101 upon occurrence of change of control and below investment-grade rating
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| Trade date: | Aug. 15
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| Settlement date: | Aug. 18
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| Ratings: | Moody’s: Baa2
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| S&P: BBB-
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| Distribution: | SEC registered
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| Cusip: | 469814AB3
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