Published on 2/16/2023 in the Prospect News Investment Grade Daily.
New Issue: Leidos prices $750 million of 5.75% 10-year notes at 200 bps spread
By Wendy Van Sickle
Columbus, Ohio, Feb. 16 – Leidos Holdings Inc. priced $750 million of 5.75% senior notes due March 15, 2033 (Baa2/BBB-) at 99.297 to yield 5.843% on Thursday at a spread of 200 basis points over Treasuries, according to a 424B5 filing with the Securities and Exchange Commission.
BofA Securities, Inc., Citigroup Global Markets Inc., MUFG Securities Americas Inc., Capital One Securities, Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc. were bookrunners for the offering.
The notes will be guaranteed by Leidos Holdings, Inc.
The company intends to use proceeds to pay a portion of the outstanding balance on its 2020 term loan facility, repurchase any 2.95% notes due May 15, 2023 tendered in a concurrent tender offer and pay related fees and expenses. Any remaining proceeds from the new notes will be used to repay any 2023 notes that remain outstanding following the tender offer and, to the extent proceeds remain, to fund general corporate purposes.
Leidos is a Reston, Va.-based defense, aviation, information technology and engineering company.
| Issuer: | Leidos Holdings Inc.
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| Guarantor: | Leidos Holdings, Inc.
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| Amount: | $750 million
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| Issue: | Senior notes
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| Maturity: | March 15, 2033
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| Bookrunners: | BofA Securities, Inc., Citigroup Global Markets Inc., MUFG Securities Americas Inc., Capital One Securities, Inc., J.P. Morgan Securities LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc. and U.S. Bancorp Investments, Inc.
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| Co-managers: | BMO Capital Markets Corp., Fifth Third Securities, Inc., Goldman Sachs & Co. LLC, Regions Securities LLC and TD Securities (USA) LLC
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| Trustee: | Citibank, NA
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| Counsel to issuer: | Davis Polk & Wardwell LLP
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| Counsel to underwriters: | Cravath, Swaine & Moore LLP
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| Coupon: | 5.75%
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| Price: | 99.297
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| Yield: | 5.843%
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| Spread: | Treasuries plus 200 bps
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| Call features: | Make-whole call at Treasuries plus 30 bps prior to Dec. 15, 2032; thereafter at par
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| Trade date: | Feb. 16
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| Settlement date: | Feb. 28
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| Ratings: | Moody’s: Baa2
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| S&P: BBB-
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| Distribution: | SEC registered
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| Cusip: | 52532XAJ4
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