Published on 2/4/2011 in the Prospect News High Yield Daily.
New Issue: England's Towergate sells downsized £520 million of notes in two parts
By Paul A. Harris
Portland, Ore., Feb. 4 - Towergate Finance plc completed a downsized £520 million sale of notes in two parts on Friday, according to market sources.
The deal included a downsized £230 million tranche of seven-year senior secured notes (B1//BB) which priced at par to yield 8½%.
The issue, which was downsized from £280 million, priced on top of price talk that was downwardly revised from previous talk of 8¾% area.
Towergate also priced a £290 million tranche of eight-year senior unsecured notes (B3//B-) at par to yield 10½%.
The unsecured notes also priced on top of price talk, which was also downwardly revised from previous talk in the 10¾% area.
J.P. Morgan Securities LLC, Credit Suisse, Goldman Sachs & Co. and Lloyds TSB were the joint bookrunners for the deal, the overall size of which was decreased from £570 million with £50 million being shifted to Towergate's term loan.
JPMorgan will bill and deliver.
Proceeds will be used to refinance debt.
Towergate is an independent insurance broker based in Maidstone, England.
| Issuer: | Towergate Finance plc
|
| Amount: | £520 million, decreased from £570 million with £50 shifted to term loan
|
| Bookrunners: | J.P. Morgan Securities LLC (bill and deliver), Credit Suisse, Goldman Sachs & Co., Lloyds TSB
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 4
|
| Settlement date: | Feb. 11
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Senior secured notes
|
| Amount: | £230 million, decreased from £280 million
|
| Maturity: | Feb. 15, 2018
|
| Coupon: | 8½%
|
| Price: | Par
|
| Yield: | 8½%
|
| Spread: | 518 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2014, then callable at 106.375, 104.25, 102.125, par on and after Feb. 15, 2017 (Special call allows issuer to redeem 10% of notes annually at 103 during non-call period)
|
| Equity clawback: | 35% at 108.5 until Aug. 5, 2011
|
| Ratings: | Moody's: B1
|
| Fitch: BB
|
| Price talk: | 8½%, revised from 8¾% area
|
|
|
| Senior unsecured notes
|
| Amount: | £290 million
|
| Maturity: | Feb. 15, 2019
|
| Coupon: | 10½%
|
| Price: | Par
|
| Yield: | 10½%
|
| Spread: | 689 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2015, then callable at 105.25, 102.625, par on and after Feb. 15, 2017
|
| Equity clawback: | 35% at 110.5 until Feb. 15, 2014
|
| Ratings: | Moody's: B3
|
| Fitch: B-
|
| Price talk: | 10½%, revised from 10¾% area
|
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