By Paul A. Harris
Portland, Ore., Sept. 12 - Activision Blizzard, Inc. priced a downsized, restructured $2.25 billion of senior notes (Ba2/BB+) in two tranches on Thursday, according to a market source.
An upsized $1.5 billion tranche of eight-year notes priced at par to yield 5 5/8%.
The tranche was increased from $1 billion. The yield printed 12.5 basis points inside of the 5¾% to 6% yield talk.
In addition the company priced an upsized $750 million tranche of 10-year notes at par to yield 6 1/8%.
The tranche was expanded from $500 million. The yield printed 12.5 bps inside of the 6¼% to 6½% yield talk.
The restructured two-part deal was earlier downsized to $2.25 billion from $2.5 billion, with $250 million of the proceeds shifted to the company's term loan. A $1 billion tranche of investment-grade rated senior secured notes was withdrawn.
There were also covenant changes.
J.P. Morgan Securities LLC and BofA Merrill Lynch were the joint bookrunners.
Proceeds, along with cash on hand and the bank debt, will be used to finance the purchase of Activision shares from Vivendi.
Proceeds will be escrowed for a maximum of 90 days from the settlement date, Sept. 19.
If the transaction is not consummated, the escrow will be refunded at par plus accrued interest.
Activision Blizzard is a Santa Monica, Calif.-based interactive entertainment publishing company.
| Issuer: | Activision Blizzard, Inc.
|
| Amount: | $2.25 billion, downsized from $2.5 billion
|
| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, BofA Merrill Lynch
|
| Co-managers: | Goldman Sachs & Co., Mitsubishi, HSBC, Mizuho, RBC Capital Markets, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc.
|
| Investor put: | 101% upon change of control
|
| Trade date: | Sept. 12
|
| Settlement date: | Sept. 19
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
|
|
| Eight-year notes
|
| Amount: | $1.5 billion, increased from $1 billion
|
| Maturity: | Sept. 15, 2021
|
| Coupon: | 5 5/8%
|
| Price: | Par
|
| Yield: | 5 5/8%
|
| Spread: | 308 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2016, then callable at 104.219, 102.813, 101.406, par on and after Sept. 15, 2019
|
| Equity clawback: | 35% at 105.652 until Sept. 15, 2016
|
| Price talk: | 5¾% to 6%
|
|
|
| Ten-year notes
|
| Amount: | $750 million, increased from $500 million
|
| Maturity: | Sept. 15, 2023
|
| Coupon: | 6 1/8%
|
| Price: | Par
|
| Yield: | 6 1/8%
|
| Spread: | 325 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2018, then callable at 103.063, 102.042, 101.021, par on and after Sept. 15, 2021
|
| Equity clawback: | 35% at 106.125 until Sept. 15, 2016
|
| Price talk: | 6¼% to 6½%
|
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