Vivint talks $900 million eight-year senior notes to yield 5¾%-6%; pricing Thursday

By Paul A. Harris

Portland, Ore., July 1 – Vivint Smart Home Inc. talked its $900 million offering of eight-year senior notes (Caa1/CCC) to yield 5¾% to 6%, according to market sources.

Official talk come tight to initial guidance in the low 6% area.

The Rule 144A and Regulation S deal is set to price on Thursday.

Credit Suisse Securities (USA) LLC is the left bookrunner. BofA Securities Inc., Citigroup Global Markets Inc., Citizens Capital Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, HSBC Securities (USA) Inc., Mizuho Securities USA Inc. and RBC Capital Markets LLC are the joint bookrunners. Blackstone is the co-manager.

The notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback and a 101% poison put.

The issuing entity will be APX Group, Inc., a wholly owned subsidiary of Vivint.

The Provo, Utah-based smart home services provider plans to use the proceeds plus proceeds from new senior secured credit facilities to redeem all $677 million of its 7 7/8% senior secured notes due 2022, all $400 million of its 7 5/8% senior notes due 2023 and all $225 million of its 8½% senior secured notes due 2024 and to pay off all of its existing credit facilities.

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