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Alcoa upsizes to $1.25 billion, adds 10-year notes tranche, sets talk; deal to price Thursday
By Paul A. Harris
Portland, Ore., Sept. 22 – Alcoa Inc. upsized its offering of senior notes (Ba3/BB-) to $1.25 billion from $1 billion and restructured the deal to include a second tranche, a syndicate source said.
The upsized deal now includes $750 million of eight-year notes, which come with three years of call protection, talked to yield 7% to 7¼%.
The added tranche is a $500 million offering of 10-year notes, which comes with five years of call protection. The tranche is talked to price 25 basis points behind the eight-year notes, or 7¼% to 7½%.
Books close at 1 p.m. ET on Thursday, and the Rule 144A and Regulation S for life deal is set to price thereafter.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., BofA Merrill Lynch, MUFG, BBVA, BNP Paribas Securities Corp., Deutsche Bank Securities Inc., Goldman Sachs & Co., SunTrust Robinson Humphrey Inc. and SMBC Nikko are the joint bookrunners.
Bradesco, Bank of New York, ANZ, PNC Capital Markets, Williams, Scotia Capital, RBC Capital Markets and Capital One are the co-managers.
The issuing entity will be wholly owned subsidiary Alcoa Nederland Holding BV.
The New York-based aluminum company plans to use the proceeds to fund the separation of Alcoa Corp. from Arconic Inc.
Alcoa Corp. will retain the business units focused on bauxite, alumina, aluminum, cast products, North American packaged rolled products and energy.
Arconic will retain the engineered products and solutions, transportation and construction solutions and rolled products segments.
Following the separation, existing Alcoa Inc. shareholders will own about 80% of the common stock of Alcoa Corp., and the remainder will be owned by Arconic.
The separation is expected to be completed before the end of the year.
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