By Paul A. Harris
Portland, Ore., Nov. 14 – HC2 Holdings, Inc. priced a downsized $470 million issue of 11˝% senior secured notes (Caa1/B-) at 98.75 to yield 12% on Wednesday, according to an informed source.
The deal, via bookrunner Jefferies LLC, was downsized from $535 million, with $55 million of the proceeds shifted to a concurrent issue of 7˝% convertible senior notes due 2022, decreasing the overall amount of the capital markets transaction to $525 million from $535 million.
The coupon, reoffer price and yield all came on top of talk.
The maturity of the senior secured notes decreased to three years from five years. Call protection decreased to 1.5 years from two years.
There were also changes to the minimum collateral coverage, minimum liquidity, maximum net leverage and minimum fixed charge coverage covenants.
In addition, the company put in place a redemption feature specifying that proceeds from any sale, transfer or disposition of assets must be applied to fund a call or put of the senior secured notes at 104.5. That premium steps down to par in the final year.
Proceeds from the senior secured notes and convertibles will be used to redeem the company’s outstanding 11% senior secured notes due 2019.
HC2 is a New York-based diversified holding company with four core operating subsidiaries in the construction, marine services, natural gas distribution and telecommunications businesses.
| Issuer: | HC2 Holdings, Inc.
|
| Amount: | $470 million
|
| Maturity: | Dec. 1, 2021 (Maturity decreased to three years from five years)
|
| Securities: | Senior secured notes
|
| Bookrunner: | Jefferies LLC
|
| Coupon: | 11˝%
|
| Price: | 98.75
|
| Yield: | 12%
|
| First call: | Make-whole at Treasuries plus 50 bps until June 1, 2020, then callable at 105.75 (Call protection decreased to 1.5 years from two years)
|
| Equity clawback: | 40% at 111.5 until June 1, 2020
|
| Asset sale put/call: | 104.5 until Dec. 1, 2020, then at par until maturity
|
| Trade date: | Nov. 14
|
| Settlement date: | Nov. 20
|
| Ratings: | Moody's: Caa1
|
| S&P: B-
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 11˝% coupon at 98.75 to yield 12%
|
| Marketing: | Roadshow
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