Adient sets tranche sizes, price talk in $2 billion equivalent two-part deal; pricing Friday

By Paul A. Harris

Portland, Ore., Aug. 5 – Adient Global Holdings Ltd., the automotive seating and interiors business which Milwaukee-based Johnson Controls Inc. is spinning off, tweaked the tranche sizes and set final pricing in its $2 billion equivalent two-part senior notes offering (expected Ba3/confirmed BB), a syndicate source said on Friday.

Books were scheduled to close at 9:30 a.m. ET on Friday.

Global coordinator Citigroup is at the helm of the Rule 144A and Regulation S for life deal.

A €1 billion offering of eight-year bullet notes, featuring a make-whole call at Bunds plus 50 bps but otherwise non-callable, launched at 3½%. The euro tranche is upsized from an expected $1 billion equivalent. Final pricing comes at the tight end of the 3½% to 3¾% talk and tight to initial guidance in the low 4% yield context.

Active bookrunner Barclays will bill and deliver for the euro-denominated tranche. Credit Agricole and UniCredit are also active bookrunners.

Banca IMI, Commerzbank, ING and Citigroup are joint bookrunners. BofA Merrill Lynch, Goldman Sachs & Co., Industrial and Commercial Bank of China, MUFG, TD, U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are co-managers.

The dollar-denominated tranche, $900 million of 10-year notes with a Treasuries plus 50 bps make-whole call for the first five years then callable at a premium, launched at 4 7/8%. The dollar tranche is downsized from an expected $1 billion. Final pricing comes at the tight end of talk in the 5% area and tight to initial guidance in the low 5% area.

Citigroup Global Markets Inc. is the lead bookrunner for the dollar notes. BofA Merrill Lynch, Goldman Sachs, J.P. Morgan Securities LLC, MUFG, U.S. Bancorp and Wells Fargo are joint bookrunners.

Banca IMI, Barclays, BBVA Securities Inc., Commerzbank Capital Markets Corp., Credit Agricole, ING Financial Markets LLC, Standard Chartered Bank, TD Securities and UniCredit are the co-managers.

Full terms and allocations are scheduled for late Friday morning, New York time.

The dollar-denominated notes feature a three-year 40% equity clawback.

The notes in both tranches feature 101% poison puts.

Proceeds will be used to help fund the spinoff.

The financing also includes a $3 billion credit facility.

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