Published on 10/3/2016 in the Prospect News Investment Grade Daily.
New Issue: Xylem prices $900 million of 10- and 30-year senior notes
By Cristal Cody
Eureka Springs, Ark., Oct. 3 – Xylem Inc. priced $900 million of senior notes (Baa2/BBB) in two tranches on Monday, according to an FWP filing with the Securities and Exchange Commission.
The company sold $500 million of 3.25% 10-year notes at 99.794 to yield 3.274%, or 165 basis points over Treasuries.
Xylem priced $400 million of 4.375% 30-year notes at 99.957 to yield 4.438%, or Treasuries plus 210 bps.
Citigroup Global Markets Inc., Wells Fargo Securities LLC and J.P. Morgan Securities LLC were the bookrunners.
Proceeds will be used, along with cash on hand, proceeds from commercial paper and borrowings under a new euro-denominated term loan, for the company’s planned acquisition of all of the subsidiaries of Sensus Worldwide Ltd. for about $1.7 billion in cash. The company will use any remaining proceeds for general corporate purposes.
The water technology company is based in White Plains, N.Y.
| Issuer: | Xylem Inc.
|
| Amount: | $900 million
|
| Description: | Senior notes
|
| Bookrunners: | Citigroup Global Markets Inc., Wells Fargo Securities LLC, J.P. Morgan Securities LLC
|
| Co-managers: | BNP Paribas Securities Corp., ING Financial Markets LLC, MUFG, SG Americas Securities, LLC, U.S. Bancorp Investments, Inc., Deutsche Bank Securities Inc., ANZ Securities, Inc., Mizuho Securities USA Inc., Skandinaviska Enskilda Banken AB, TD Securities (USA) LLC, Williams Capital Group, LP
|
| Trade date: | Oct. 3
|
| Settlement date: | Oct. 11
|
| Ratings: | Moody’s: Baa2
|
| S&P: BBB
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $500 million
|
| Maturity: | Nov. 1, 2026
|
| Coupon: | 3.25%
|
| Price: | 99.794
|
| Yield: | 3.274%
|
| Spread: | Treasuries plus 165 bps
|
| Call features: | Make-whole call before Aug. 1, 2026 at Treasuries plus 25 bps; on or after Aug. 1, 2026 at par; special call at 101 if acquisition not completed on or before Feb. 15, 2017 or in certain cases up to May 15, 2017
|
| Put option: | 101%
|
|
|
| 30-year notes
|
| Amount: | $400 million
|
| Maturity: | Nov. 1, 2046
|
| Coupon: | 4.375%
|
| Price: | 99.957
|
| Yield: | 4.438%
|
| Spread: | Treasuries plus 210 bps
|
| Call features: | Make-whole call before Aug. 1, 2046 at Treasuries plus 35 bps; on or after May 1, 2046 at par; special call at 101 if acquisition not completed on or before Feb. 15, 2017 or in certain cases up to May 15, 2017
|
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