Published on 5/25/2016 in the Prospect News High Yield Daily.
New Issue: Hertz upsizes to $1.24 billion, prices secured notes in two tranches
By Paul A. Harris
Portland, Ore., May 24 – Hertz Equipment Rental Corp. priced an upsized $1.24 billion of senior secured second-priority notes (B3/B+) in two tranches on Wednesday, according to a syndicate source.
The deal included $610 million of six-year notes that priced at par to yield 7½% and $625 million of eight-year notes that priced at par to yield 7¾%.
BofA Merrill Lynch was the left bookrunner. Goldman Sachs & Co., Barclays, BMO Securities, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole CIB, J.P. Morgan Securities LLC and RBC Capital Markets were the joint bookrunners.
The issuing entities will be Herc Spinoff Escrow Issuer, LLC and Herc Spinoff Escrow Issuer, Corp., wholly owned subsidiaries of Hertz Equipment Rental.
Proceeds will be used to finance the proposed spinoff of Hertz Global's equipment rental business.
The issuer is an Estero, Fla-based equipment rental company.
| Issuer: | Herc Spinoff Escrow Issuer, LLC and Herc Spinoff Escrow Issuer, Corp.
|
| Amount: | $1,235,000,000, increased from $1.1 billion
|
| Securities: | Senior secured second-priority notes
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| Left bookrunner: | BofA Merrill Lynch
|
| Joint bookrunners: | Goldman Sachs & Co., Barclays, BMO Securities, BNP Paribas Securities Corp., Citigroup Global Markets Inc., Credit Agricole CIB, J.P. Morgan Securities LLC, RBC Capital Markets
|
| Co-managers: | Capital One, Deutsche Bank Securities Inc., Mizuho Securities, Natixis, RBS Securities, Scotia Capital, UniCredit
|
| Trade date: | May 25
|
| Settlement date: | June 9
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Six-year notes
|
| Amount: | $610 million
|
| Maturity: | June 1, 2022
|
| Coupon: | 7½%
|
| Price: | Par
|
| Yield: | 7½%
|
| Spread: | 593 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until June 1, 2019, then callable at a premium
|
|
|
| Eight-year notes
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| Amount: | $625 million
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| Maturity: | June 1, 2024
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| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 599 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until June 1, 2019, then callable at a premium
|
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