By Paul A. Harris
Portland, Ore., Nov. 16 – OpenText priced a $1 billion issue of Open Text Corp. five-year senior secured notes (Ba1/BBB-/BBB) at par to yield 6.9%, with a 304 basis points spread to Treasuries, on Wednesday, according to market sources.
The yield printed at the tight end of yield talk that was set in the 7% area (plus or minus 10 bps). Initial guidance was in the Treasuries plus 350 bps area.
The deal was priced on the investment-grade desk, sources said.
However, a high-yield bond trader saw the notes quoted at both prices and spreads in the secondary market late Wednesday afternoon, indicating that the notes were trading in both investment-grade style trades as well as high-yield style trades.
Heading into Wednesday’s close, the new OpenText 6.9% notes due December 2025 were 100.7 bid but were also trading at 287.7 bps bid, the trader said.
Barclays, BMO Capital Markets Corp., RBC and Citigroup Global Markets Inc. were the joint active bookrunners.
Proceeds will be used to support the acquisition of Micro Focus International plc and to repay Micro Focus debt.
OpenText is a Waterloo, Ont.-based software provider of business-to-business cloud integration services. Micro Focus is a Newbury, U.K.-based enterprise software company.
| Issuer: | Open Text Corp.
|
| Amount: | $1 billion
|
| Issue: | Senior secured notes
|
| Maturity: | Dec. 1, 2027
|
| Active bookrunners: | Barclays, BMO Capital Markets Corp., RBC and Citigroup Global Markets Inc.
|
| Coupon: | 6.9%
|
| Price: | Par
|
| Yield: | 6.9%
|
| Spread: | 304 bps
|
| Call protection: | Make-whole call until one month prior to maturity, then callable at par, otherwise non-callable
|
| Trade date: | Nov. 16
|
| Settlement date: | Dec. 1
|
| Ratings: | Moody's: Ba1
|
| S&P: BBB-
|
| Fitch: BBB
|
| Distribution: | Rule 144A and Regulation S for life
|
| Guidance: | 7% area
|
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