Published on 1/27/2014 in the Prospect News High Yield Daily.
New Issue: Harland Clarke prices $815 million notes in two tranches
By Paul A. Harris
Portland, Ore., Jan. 27 - Harland Clarke Holdings Corp. priced a downsized $815 million two-part offering of high yield notes on Monday, according to a syndicate source.
The deal included a $275 million issue of six-year senior secured notes (B1/B+), which priced at par to yield 6 7/8%. The yield printed at the tight end of yield talk that was set in the 7% area.
In addition the San Antonio-based company priced a downsized $540 million issue of seven-year senior unsecured notes (Caa1/B-) at par to yield 9¼%. The tranche was downsized from $590 million with the shifting of $50 million of proceeds to the concurrent bank loan. The unsecured notes priced on top of price talk.
Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Jefferies LLC were the joint bookrunners.
Proceeds will be used to help fund the acquisition of Valassis and to refinance debt.
Harland Clarke is a provider of payment, marketing and security services.
| Issuer: | Harland Escrow Corp. and Harland Clarke Holdings Corp.
|
| Amount: | $815 million, decreased from $865 million
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| Bookrunners: | Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Jefferies LLC
|
| Co-managers: | Mitsubishi UFJ Securities (USA), Inc., PNC Capital Markets LLC
|
| Trade date: | Jan. 27
|
| Settlement date: | Feb. 4
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Senior secured notes
|
| Amount: | $275 million
|
| Maturity: | March 1, 2020
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Spread: | 488 bps
|
| First call: | Mach 1, 2017 at 103.438
|
| Equity clawback: | 35% at 106.875 until March 1, 2017
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B+
|
| Price talk: | 7% area
|
|
|
| Senior unsecured notes
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| Amount: | $540 million, decreased from $590 million
|
| Maturity: | March 1, 2021
|
| Coupon: | 9¼%
|
| Price: | Par
|
| Yield: | 9¼%
|
| Spread: | 704 bps
|
| First call: | March 1, 2017 at 106.938
|
| Equity clawback: | 35% at 109.25 until March 1, 2017
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Price talk: | 9¼% area
|
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