By Paul A. Harris
Portland, Ore., Oct. 14 – Rolls-Royce plc priced approximately £1.99 billion equivalent of senior bullet notes (Ba3/BB-/BB+) in three tranches on Wednesday, according to market sources.
A €750 million tranche of long five-year notes priced at par to yield 4 5/8%, inside of talk in the 4 7/8% area. Initial talk was 5% to 5¼%.
A downsized £545 million tranche of straight seven-year notes priced at par to yield 5¾%, low to talk in the 6% area. Initial talk was in the 6¼% area. The sterling-denominated tranche size decreased from £550 million.
A $1 billion tranche of straight seven-year notes also priced at par to yield 5¾%, low to talk in the 6% area. Initial talk was in the 6¼% area.
The dollar-denominated tranche was playing to $4.5 billion of orders when books closed on Wednesday, a bond trader said.
Prior to the late £5 million downsize of the sterling-denominated tranche the deal had grown to £2 billion equivalent from £1.5 billion equivalent after having previously been upsized from £1 billion equivalent.
Joint global coordinator and joint bookrunner BNP Paribas will bill and deliver for the euro-denominated notes. Joint global coordinator and joint bookrunner Citigroup will bill and deliver for the dollar-denominated notes. Joint global coordinator and joint bookrunner Goldman Sachs will bill and deliver for the sterling-denominated notes.
Proceeds, together with a rights issue, will be used to enhance liquidity headroom, for general corporate purposes and to repay upcoming maturities, including $500 million of 2 3/8% notes due October 2020, €750 million of 2 1/8% notes due June 2021 and £300 million of commercial paper due March 2021, and may also be used to reduce any potential future increase in the United Kingdom Export Finance loan.
Rolls-Royce is a Manchester, England-based engineering company.
| Issuer: | Rolls-Royce plc
|
| Amount: | Approximately £1.99 billion equivalent
|
| Securities: | Senior notes
|
| Global coordinators/bookrunners: | BNP Paribas (bill and deliver for euro-denominated notes), Goldman Sachs (bill and deliver for sterling-denominated notes), Citigroup (bill and deliver for dollar-denominated notes)
|
| Joint bookrunners: | Bayern LB, BofA, Barclays, Credit Agricole, HSBC, Lloyds, Mizuho, MUFG, NatWest, Santander, SEB, SMBC, SG, Standard Chartered Bank
|
| Call protection: | Par calls three months prior to respective maturities, otherwise non-callable
|
| Trade date: | Oct. 14
|
| Distribution: | Rule 144A and Regulation S for life
|
| Ratings: | Moody's: Ba3
|
| S&P: BB-
|
| Fitch: BB+
|
| Marketing: | Roadshow
|
|
|
| Euro-denominated notes
|
| Amount: | €750 million
|
| Maturity: | Feb. 16, 2026
|
| Coupon: | 4 5/8%
|
| Price: | Par
|
| Yield: | 4 5/8%
|
| Spread: | 540 bps
|
| Price talk: | 4 7/8% area
|
|
|
| Sterling-denominated notes
|
| Amount: | £545 million, decreased from £550 million
|
| Maturity: | Oct. 15, 2027
|
| Coupon: | 5¾%
|
| Price: | Par
|
| Yield: | 5¾%
|
| Spread: | 575 bps
|
| Price talk: | 6% area
|
|
|
| Dollar-denominated notes
|
| Amount: | $1 billion
|
| Maturity: | Oct. 15, 2027
|
| Coupon: | 5¾%
|
| Price: | Par
|
| Yield: | 5¾%
|
| Spread: | 525 bps
|
| Price talk: | 6% area
|
|
|
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