Published on 1/24/2003 in the Prospect News High Yield Daily.
New Issue: Houghton Mifflin upsizes two-piece deal to $1 billion
By Paul A. Harris
St. Louis, Jan. 24 - Houghton Mifflin Co. upsized its two-part high-yield note offering to $1 billion from a planned $650 million at pricing on Friday, according to a syndicate source.
The company priced $600 million of senior notes due Feb. 1, 2011 (B2/B) at par to yield 8¼%. Price talk was 8¼%-8½%. The tranche was originally $250 million.
It also priced $400 million of senior subordinated notes due Feb. 1, 2013 (B3/B). The 9 7/8% notes priced at 99.22 to yield 10%. Price talk was 175 basis points behind the yield of the new senior notes.
Goldman Sachs & Co., CIBC World Markets and Deutsche Bank Securities Inc. were joint bookrunners. Fleet Securities was co-manager.
Proceeds from the Rule 144A deal will be used to help fund the purchase of Houghton Mifflin from Vivendi Universal by Thomas H. Lee Partners, Blackstone Group, Bain Capital and Apax Partners.
| Issuer: | Houghton Mifflin Co.
|
| Amount: | $1 billion
|
| Bookrunners: | Goldman Sachs, CIBC World Markets, Deutsche Bank Securities (joint)
|
| Co-manager: | Fleet Securities
|
| Settlement date: | Jan. 30, 2003
|
|
|
| Senior tranche
|
| Amount: | $600 million
|
| Maturity: | Feb. 1, 2011
|
| Securities description: | Senior notes
|
| Coupon: | 8¼%
|
| Price: | Par
|
| Yield: | 8¼%
|
| Spread: | 447 basis points
|
| Call features: | Callable on Feb. 1, 2007 at 104.125, then at 102.063, declining to par on Feb. 1, 2009 and thereafter
|
| Equity clawback: | Until Feb. 1, 2006 for 35% at 108.25
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B
|
| Rule 144A Cusip: | 441560AF6
|
| Price talk: | 8¼%-8½%
|
|
|
| Subordinated tranche
|
| Amount: | $400 million
|
| Maturity: | Feb. 1, 2013 |
|
| Securities description: | Senior subordinated notes
|
| Coupon: | 9 7/8%
|
| Price: | 99.22
|
| Yield: | 10%
|
| Spread: | 609 basis points
|
| Call features: | Callable on Feb. 1, 2008 at 104.938, then at 103.292, 101.646, declining to par on Feb. 1, 2011 and thereafter
|
| Equity clawback: | Until Feb. 1, 2006 for 35% at 109.875
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
| Rule 144A Cusip: | 441560AG4
|
| Price talk: | 175 basis point area behind the senior notes
|
|
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