By Paul A. Harris
Portland, Ore., April 5 – American Greetings Corp. priced a downsized, restructured $282.5 million issue of 8¾% seven-year senior notes (Caa1/CCC+) at 87 to yield 11.499% on Thursday, according to a market sources.
The deal was cut from $300 million, hours after being previously downsized from $325 million.
The $25 million amount of the earlier downsize was shifted to the term loan, a source said.
In a restructuring, the tenor of the notes decreased to seven years from eight years.
The coupon printed on top of coupon talk. The reoffer price came rich to price talk of 85.
Talk on the deal widened during the time it was on the road, market sources say. Initially talked in the low-to-mid 8% range, guidance blew out to 10½% to 11% early in the April 2 week.
Deutsche Bank Securities Inc., Citizens Capital, ING, BofA Merrill Lynch, HSBC and SMBC Nikko were the joint bookrunners.
Proceeds will be used to purchase the company’s 7 7/8% notes due 2025 in a change-of-control offer related to the acquisition of a 60% stake in the company by Clayton, Dubilier & Rice.
American Greetings is a Cleveland-based designer, manufacturer and distributor of greeting cards, gift packaging, party goods and stationery products.
| Issuer: | American Greetings Corp.
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| Amount: | $282.5 million, decreased from $300 million after previously being decreased from $325 million
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| Tenor: | Seven years, decreased from eight years
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| Securities: | Senior notes
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| Bookrunners: | Deutsche Bank, Barclays, Citizens, ING, BofA Merrill Lynch, HSBC, SMBC Nikko
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| Coupon: | 8¾%
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| Price: | 87
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| Yield: | 11.499%
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| Call protection: | Three years
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| Trade date: | April 4
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| Settlement date: | April 9
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| Ratings: | Moody’s: Caa1
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| S&P: CCC+
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| Distribution: | Rule 144A
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| Price talk: | 8¾% coupon at 85
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| Marketing: | Roadshow
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