By Paul A. Harris
Portland, Ore., March 26 – Allison Transmission, Inc. priced a $500 million issue of 10-year senior notes (Ba3//BB) at par to yield 5 7/8% in a quick-to-market Tuesday trade, according to market sources.
The yield printed at the tight end of yield talk in the 6% area and tighter than initial guidance in the low 6% area.
The drive-by deal, which was propelled into the market on reverse inquiry, was heard to be playing to $1.5 billion of orders at noon ET on Tuesday, according to a trader, who had the bonds trading at par 5/8 bid, 101 1/8 offered in the aftermarket.
Earlier, an investor marked the new Allison Transmission 5 7/8% notes due June 2029 at par ¾ bid, 101¼ offered.
Citigroup Global Markets Inc. was the left bookrunner.
Joint bookrunners were BMO Capital Markets Corp., Fifth Third Securities Inc., Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, MUFG, SMBC Nikko Securities America Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC.
The Indianapolis-based automatic transmission company and supplier of hybrid-propulsion systems plans to use the proceeds to pay down its term loan B.
| Issuer: | Allison Transmission, Inc.
|
| Amount: | $500 million
|
| Maturity: | June 1, 2029
|
| Securities: | Senior notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | BMO Capital Markets Corp., Fifth Third Securities Inc., Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, MUFG, SMBC Nikko Securities America Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC
|
| Coupon: | 5 7/8%
|
| Price: | Par
|
| Yield: | 5 7/8%
|
| Spread: | 346 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until June 1, 2024, then callable at 102.938
|
| Equity clawback: | 40% at 105.875 until June 1, 2022
|
| Trade date: | March 26
|
| Settlement date: | March 29
|
| Ratings: | Moody's: Ba3
|
| Fitch: BB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 6% area
|
| Marketing: | Quick to market
|
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