Published on 6/5/2019 in the Prospect News Investment Grade Daily.
New Issue: Parker-Hannifin prices $2.38 billion of senior notes in three parts
By Cristal Cody
Tupelo, Miss., June 5 – Parker-Hannifin Corp. priced a $2,375,000,000 three-part offering of senior notes (Baa1/A/A-) on Wednesday, according to a market source and an FWP filing with the Securities and Exchange Commission.
A $575 million tranche of 2.7% five-year notes priced at 99.954 to yield 2.71%, or a spread of 85 basis points over Treasuries.
Parker-Hannifin sold $1 billion of 3.25% 10-year notes at 99.687 to yield 3.287%. The notes priced with a Treasuries plus 117 bps spread.
In the final tranche, the company priced $800 million of 4% 30-year notes at 98.504 to yield 4.087% and a 145 bps over Treasuries spread.
The notes priced on the tight side of guidance.
On the five-year tranche, Barclays, J.P. Morgan Securities, LLC and Wells Fargo Securities LLC were the bookrunners.
Bookrunners on the 10-year notes were Barclays, JPMorgan and TD Securities (USA) LLC.
The bookrunners on the 30-year tranche were Barclays, JPMorgan and HSBC Securities (USA) Inc.
The company held fixed income investor calls on Tuesday.
Proceeds will be used to finance a portion of the company’s approximate $3.68 billion acquisition of Lord Corp. that is expected to close before the end of the year.
The five- and 30-year tranches have a special mandatory call at 101 if the acquisition is not completed on or before April 27, 2020.
Parker-Hannifin is a Cleveland-based manufacturer of motion and control technologies.
| Issuer: | Parker-Hannifin Corp.
|
| Amount: | $2,375,000,000
|
| Description: | Senior notes
|
| Trade date: | June 5
|
| Settlement date: | June 14
|
| Ratings: | Moody’s: Baa1
|
| S&P: A
|
| Fitch: A-
|
| Distribution: | SEC registered
|
| Marketing: | Fixed income investor calls
|
|
|
| Five-year notes
|
| Amount: | $575 million
|
| Maturity: | June 14, 2024
|
| Bookrunners: | Barclays, J.P. Morgan Securities, LLC and Wells Fargo Securities LLC
|
| Co-managers: | TD Securities (USA) LLC, HSBC Securities (USA) Inc., Citigroup Global Markets Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC, Commerz Markets LLC, Loop Capital Markets LLC, MUFG, Lloyds Securities Inc. and UniCredit Capital Markets LLC
|
| Coupon: | 2.7%
|
| Price: | 99.954
|
| Yield: | 2.71%
|
| Spread: | Treasuries plus 85 bps
|
| Call features: | Make-whole call before May 14, 2024 at Treasuries plus 15 bps; thereafter at par; special mandatory call at 101 if Lord acquisition is not completed on or before April 27, 2020
|
| Price talk: | Treasuries plus 90 bps area, plus or minus 5 bps; initial talk at Treasuries plus 105 bps area
|
|
|
| 10-year notes
|
| Amount: | $1 billion
|
| Maturity: | June 14, 2029
|
| Bookrunners: | Barclays, J.P. Morgan Securities, LLC and TD Securities (USA) LLC
|
| Co-managers: | HSBC Securities (USA) Inc., Wells Fargo Securities, LLC, Citigroup Global Markets Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC Commerz Markets LLC, Loop Capital Markets LLC, MUFG, Lloyds Securities Inc. and UniCredit Capital Markets LLC
|
| Coupon: | 3.25%
|
| Price: | 99.687
|
| Yield: | 3.287%
|
| Spread: | Treasuries plus 117 bps
|
| Call feature: | Make-whole call before March 14, 2029 at Treasuries plus 20 bps; thereafter at par
|
| Price talk: | Treasuries plus 120 bps area, plus or minus 3 bps; initial talk at Treasuries plus 140 bps area
|
|
|
| 30-year notes
|
| Amount: | $800 million
|
| Maturity: | June 14, 2049
|
| Bookrunners: | Barclays, J.P. Morgan Securities, LLC and HSBC Securities (USA) Inc.
|
| Co-managers: | TD Securities (USA) LLC, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., KeyBanc Capital Markets Inc., Mizuho Securities USA LLC, PNC Capital Markets LLC, Commerz Markets LLC, Loop Capital Markets LLC, MUFG, Lloyds Securities Inc. and UniCredit Capital Markets LLC
|
| Coupon: | 4%
|
| Price: | 98.504
|
| Yield: | 4.087%
|
| Spread: | Treasuries plus 145 bps
|
| Call feature: | Make-whole call before Dec. 14, 2048 at Treasuries plus 25 bps; thereafter at par; special mandatory call at 101 if Lord acquisition is not completed on or before April 27, 2020
|
| Price talk: | Treasuries plus 150 bps area, plus or minus 5 bps; initial talk at Treasuries plus 165 bps area
|
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