By Paul Deckelman
New York, July 25 - Academy Ltd. priced $450 million of eight-year senior notes (Caa1/CCC+) on Monday at par to yield 9¼%, high-yield syndicate sources said.
The bonds priced at the tight end of pre-deal market price talk envisioning a yield between 9¼% and 9½%.
The issue was brought to market via an underwriting syndicate that included Credit Suisse Securities (USA) LLC, which is handling billing and delivery and keeping the physical books, Goldman Sachs & Co., which was the joint lead on the physical books, and joint passive bookrunners Barclays Capital Inc. and Morgan Stanley & Co.
The bonds were marketed to potential investors via a roadshow, which began last Tuesday.
The sources said that the notes, considered a Rule 144A issue for the life of the bonds, are non-callable for three years, have a three-year equity clawback, which allows the company to redeem up to 40% of the issue as opposed to the standard 35% clawback, and will have a 101% poison put.
Academy, based in Katy, Tex., a suburb of Houston, operates Academy Sports + Outdoors, a chain of 131 sporting goods and outdoor gear stores with outlets across the Southeastern United States plus Texas, Oklahoma and Missouri. It is in the process of being acquired by New York-based private equity firm Kohlberg Kravis Roberts & Co. for an undisclosed price.
The financing for the leveraged buyout includes a $1.49 billion credit facility, consisting of an $840 million covenant-light term loan and a $650 million asset-based revolving credit line, in addition to the bond deal.
The official issuer of record for the bonds is Allstar Sub LLC, which is to be merged into Academy upon completion of the acquisition, with Academy the surviving entity and obligor under the term loan and notes.
| Issuer: | Allstar Sub LLC
|
| Amount: | $450 million
|
| Maturity: | Aug. 1, 2019
|
| Securities: | Senior notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC (billing and delivery, physical books), Goldman Sachs & Co. (physical books joint lead), Barclays Capital, Inc. and Morgan Stanley & Co. (joint passive books)
|
| Coupon: | 9¼%
|
| Price: | Par
|
| Yield: | 9¼%
|
| Spread: | 672 basis points over comparable Treasury issue
|
| Call features: | Non-callable until Aug. 1, 2014, then at 106.938
|
| Equity clawback: | Up to 40% at 109.25 until Aug. 1, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | July 25
|
| Settlement date: | Aug. 3 (T+7)
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A for life
|
| Price talk: | 9¼% to 9½%
|
| Marketing: | Roadshow began July 19
|
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