Published on 9/28/2018 in the Prospect News High Yield Daily.
New Issue: Envision Healthcare prices downsized $1.23 billion notes at par to yield 8¾%
By Paul A. Harris
Portland, Ore., Sept. 28 – Envision Healthcare Corp. priced a downsized $1,225,000,000 issue of eight-year senior notes (Caa1/B-) at par to yield 8¾% on Friday, according to market sources.
The issue size decreased from $1,625,000,000 with $400 million of proceeds shifted to the concurrent term loan, increasing its size to $5.45 billion from $5.05 billion.
The bond yield printed in the middle of yield talk in the 8¾% area. That talk came at the tight end of the earlier whisper of 8¾% to 9%, as well as tight to initial price talk in the high 8% area, sources say.
Timing on the notes offering was accelerated. A roadshow that had been expected to continue into the Oct. 1 week was shortened.
Citigroup Global Markets Inc. is the left bookrunner. Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co. LLC, Jefferies LLC, UBS Investment Bank, KKR Capital Markets, SG CIB, RBC Capital Markets LLC, HSBC Securities, Mizuho Securities USA Inc., BMO Securities, SunTrust Robinson Humphrey Inc. and Credit Agricole CIB are the joint bookrunners.
Proceeds will be used to help fund the buyout of the company by KKR for $46.00 per share in cash, or about $9.9 billion including the assumption or repayment of debt.
The initial issuing entity will be Enterprise Merger Sub Inc., which will become Envision Healthcare Corp. when the buyout closes.
Envision is a Nashville, Tenn.-based provider of physician-led services and post-acute care and ambulatory surgery services.
| Issuer: | Enterprise Merger Sub Inc. to be merged with and into Envision Healthcare Corp.
|
| Amount: | $1,225,000,000, decreased from $1,625,000,000
|
| Maturity: | Oct. 15, 2026
|
| Securities: | Senior notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Barclays, Goldman Sachs & Co. LLC, Jefferies LLC, UBS Securities LLC, KKR, SG CIB, RBC Capital Markets LLC, HSBC Securities, Mizuho Securities USA Inc., BMO, SunTrust Robinson Humphrey Inc., Credit Agricole CIB
|
| Coupon: | 8¾%
|
| Price: | Par
|
| Yield: | 8¾%
|
| Spread: | 571 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Oct. 15, 2021, then callable at 104.375
|
| Equity clawback: | 40% at 108.75 until Oct. 15, 2021
|
| Trade date: | Sept. 28
|
| Settlement date: | Oct. 11
|
| Ratings: | Moody's: Caa1
|
| S&P: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8¾% area
|
| Marketing: | Roadshow
|
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