By Paul A. Harris
Portland, Ore., July 19 - Innovation Ventures, LLC, makers of 5-Hour Energy, in conjunction with Innovation Ventures Finance Corp., priced an upsized $450 million issue of seven-year senior secured notes (B2/B-/) at par to yield 9½% on Thursday, according to an informed source.
The yield printed on top of the yield talk.
Bank of America Merrill Lynch and Jefferies & Co. were the joint bookrunners for the issue, which was upsized from $400 million.
The notes feature a make-whole call at Treasuries plus 50 basis points until Aug. 15, 2015, after which they become callable at 107.125. However a special call provision allows the issuer to redeem 10% of the principal annually at 103 during the non-call period.
Proceeds will be used to pay bank debt and for general corporate purposes, including capital investments in a new manufacturing plant and distribution facility, new product development, international expansion and selective strategic acquisitions.
The Farmington Hills, Mich.-based company produces energy drinks manufactured and marketed under the brand name 5-hour Energy.
| Issuers: | Innovation Ventures, LLC and Innovation Ventures Finance Corp. (5-Hour Energy)
|
| Amount: | $450 million, increased from $400 million
|
| Maturity: | Aug. 15, 2019
|
| Securities: | Senior secured notes
|
| Bookrunners: | Bank of America Merrill Lynch, Jefferies & Co.
|
| Coupon: | 9½%
|
| Price: | Par
|
| Yield: | 9½%
|
| Spread: | 853 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Aug. 15, 2015, then callable at 107.125, 104.75, 102.375, par on and after Aug. 15, 2018
|
| Special call: | Issuer may redeem 10% of the principal annually at 103 during the non-call period
|
| Equity clawback: | 35% at 109.5 until Aug. 15, 2015
|
| Change-of-control put: | 101%
|
| Trade date: | July 19
|
| Settlement date: | Aug. 2
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 9½%
|
| Marketing: | Brief roadshow
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