By Paul A. Harris
Portland, Ore., Oct. 25 – Rackspace Hosting Inc. priced a $1.2 billion issue of eight-year senior notes (B3/B+/BB-) at par to yield 8 5/8% on Tuesday, according to a market source.
The yield printed at the tight end of yield talk in the 8¾% area and well inside of early guidance in the low 9% area.
Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Barclays, RBC Capital Markets and Credit Suisse Securities (USA) LLC were the joint bookrunners.
Proceeds from the notes are part of the financing for the buyout of the company by Apollo Global Management LLC.
The financing also includes $2,225,000,000 of bank debt.
Apollo proposes to acquire Rackspace for $32.00 per share in cash. The transaction has a total value of $4.3 billion, which includes the assumption of $43 million of net cash.
Also, funds managed by Searchlight Capital Partners LP will make a strategic equity investment in the acquired company.
Rackspace is a San Antonio-based managed cloud company.
| Issuer: | Rackspace Hosting Inc.
|
| Amount: | $1.2 billion
|
| Maturity: | Nov. 15, 2024
|
| Securities: | Senior notes
|
| Bookrunners: | Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Barclays, RBC Capital Markets, Credit Suisse Securities (USA) LLC
|
| Coupon: | 8 5/8%
|
| Price: | Par
|
| Yield: | 8 5/8%
|
| Spread: | 697 bps
|
| First call: | Nov. 15, 2019 at 106.469
|
| Trade date: | Oct. 25
|
| Settlement date: | Nov. 3
|
| Ratings: | Moody's: B3
|
| S&P: B+
|
| Fitch: BB-
|
| Price talk: | 8¾% area
|
| Marketing: | Roadshow
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
