Published on 11/20/2017 in the Prospect News High Yield Daily.
New Issue: Talen Energy prices upsized $225 million tap of 10½% guaranteed notes due 2026 at 97.5
By Paul A. Harris
Portland, Ore., Nov. 20 – Talen Energy Supply, LLC priced an upsized $225 million add-on to its 10½% senior guaranteed notes due Jan. 15, 2026 (B1/B+) at 97.5 to yield 10.964% in a Monday drive-by, according to a syndicate source.
The issue size was increased from $200 million after having been earlier increased from $100 million.
The reoffer price came on top of price talk.
Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch, Barclays, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, MUFG and RBC Capital Markets LLC were the joint bookrunners.
The Allentown, Pa.-based independent power producer plans to use the proceeds, together with cash on hand, to refinance debt, including a portion of its senior notes due 2019, which it intends to refinance by means of a concurrent tender offer.
| Issuer: | Talen Energy Supply, LLC
|
| Amount: | $225 million, increased from $100 million
|
| Maturity: | Jan. 15, 2026
|
| Security description: | Add-on to 10½% senior guaranteed notes due Jan. 15, 2026
|
| Bookrunners: | Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., BofA Merrill Lynch, Barclays, BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, MUFG, RBC Capital Markets LLC
|
| Structuring agent: | Evercore Group LLC
|
| Coupon: | 10½%
|
| Price: | 97.5
|
| Yield to maturity: | 10.964%
|
| Spread: | 864 bps
|
| First call: | Jan. 15, 2022 at 105.25
|
| Equity clawback: | 35% at 110.5 until Jan. 15, 2021
|
| Trade date: | Nov. 20
|
| Settlement date: | Dec. 5 with accrued interest
|
| Ratings: | Moody's: B1
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 97.5
|
| Marketing: | Quick to market
|
| Original issue: | $400 million priced at 96.029 to yield 11¼% on Nov. 14, 2017
|
| Fungibility: | Add-on notes to become immediately fungible with original notes
|
| Total issue size: $625 million
|
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