By Paul A. Harris
Portland, Ore., Nov. 13 – Wesco PattonAir priced $2,075,000,000 of junk bonds in three tranches on Wednesday, according to a syndicate source.
As before, the deal features two secured tranches (B3/B).
These included an upsized $650 million tranche of 8½% five-year notes that priced at 99 to yield 8.751%, in line with final talk that specified an 8½% coupon at 99 to yield 8¾%. The tranche size increased from $600 million.
The secured portion of the deal also included a downsized $900 million tranche of 9% seven-year notes that priced at 99 to yield 9.197%, in line with talk that specified a 9% coupon at 99 to yield 9.2%. The tranche size decreased from $950 million.
Covenant changes, which had been stiffened in favor of the lenders, remained in place.
Par offers for annual amortizations of 1% in years one and two, 1.5% in year three and 2% in year four and thereafter replace a 1% sinking fund.
An excess cash flow sweep covering both tranches of secured notes increased to 75% from 50%.
A downsized $525 million tranche of 13 1/8% eight-year senior unsecured notes (Caa2/CCC+) priced at 97 to yield 13.755%, again in line with talk that specified a 13 1/8% coupon at 97 to yield 13.76%. The tranche size decreased from $550 million.
On Wednesday morning dealers announced an additional $100 million tranche of 8.25-year PIK holdco notes, with talk of 13¾% (PIK only) at par. There was no further word on that tranche at press time.
BofA Securities Inc. was the left bookrunner. Joint bookrunners were Deutsche Bank Securities Inc., Jefferies LLC, Barclays, BNP Paribas Securities Corp., Goldman Sachs & Co. LLC and HSBC Securities (USA) Inc.
Proceeds will be used to help fund the buyout of Wesco and fund the merger of Wesco with Pattonair USA, Inc., a provider of supply chain management services for the aerospace and defense industries.
Proceeds from the note sale will also be used to repay debt.
The issuing entity will be Wolverine Escrow, LLC, which is to be merged with an into Wesco Aircraft Holdings, Inc.
Wesco is a Valencia, Calif.-based supply chain services provider to the aerospace industry.
| Issuer: | Wolverine Escrow, LLC, to be merged with and into Wesco Aircraft Holdings, Inc.
|
| Amount: | $2,075,000,000
|
| Left bookrunner: | BofA Securities Inc.
|
| Joint bookrunners: | Deutsche Bank Securities Inc., Jefferies LLC, Barclays, BNP Paribas Securities Corp., Goldman Sachs & Co. LLC and HSBC Securities (USA) Inc.
|
| Trade date: | Nov. 13
|
| Settlement date: | Nov. 27
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Notes due 2024
|
| Amount: | $650 million, increased from $600 million
|
| Issue: | Senior secured notes
|
| Maturity: | Nov. 15, 2024
|
| Coupon: | 8½%
|
| Price: | 99
|
| Yield: | 8.751%
|
| Spread: | 705 bps
|
| First call date: | Nov. 15, 2021
|
| Ratings: | Moody's: B3
|
| S&P: B
|
| Price talk: | 8½% coupon at 99 to yield 8¾%
|
|
|
| Notes due 2026
|
| Amount: | $900 million, decreased from $950 million
|
| Issue: | Senior secured notes
|
| Maturity: | Nov. 15, 2026
|
| Coupon: | 9%
|
| Price: | 99
|
| Yield: | 9.197%
|
| Spread: | 742 bps
|
| First call date: | Nov. 15, 2022
|
| Ratings: | Moody's: B3
|
| S&P: B
|
| Price talk: | 9% coupon at 99 to yield 9.2%
|
|
|
| Notes due 2027
|
| Amount: | $525 million, decreased from $550 million
|
| Issue: | Senior unsecured notes
|
| Maturity: | Nov. 15, 2027
|
| Coupon: | 13 1/8%
|
| Price: | 97
|
| Yield: | 13.755%
|
| Spread: | 1,193 bps
|
| First call date: | Nov. 15, 2022
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Price talk: | 13 1/8% coupon at 97 to yield 13.76%
|
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