By Paul A. Harris
Portland, Ore., May 22 – IHO Verwaltungs GmbH, the holding company whose interests include manufacturer Schaeffler AG, priced €2.05 billion equivalent of senior secured PIK toggle notes (Ba1/BB+/BB+) in four tranches on Wednesday, according to market sources.
The tranches priced as follows:
• €800 million of six-year notes with a 3 5/8% cash coupon and a 4 3/8% PIK coupon priced at par to yield 3 5/8%, at the tight end of yield talk was in the 3¾% area;
• €500 million of eight-year notes with a 3 7/8% cash coupon and a 4 5/8% PIK coupon priced at 98.324 to yield 4 1/8%, in the middle of yield talk in the 4 1/8% area;
• $450 million of eight-year notes with at a 6% cash coupon and a 6¾% PIK coupon priced at par to yield 6%, in the middle of yield talk in the 6% area; and
• $400 million of 10-year notes with 6 3/8% cash coupon and a 7 1/8% PIK coupon priced at par to yield 6 3/8%, in the middle of yield talk in the 6 3/8% area.
Joint global coordinator Deutsche Bank Securities Inc. is the left lead and will bill and deliver for the euro-denominated notes. Joint global coordinator Citigroup Global Markets Inc. is the left lead and will bill and deliver for the dollar-denominated notes.
The Herzogenaurach, Germany-based company plans to use the proceeds, together with cash on hand, to fully redeem dollar- and euro-denominated notes due in 2021 and 2023, as well as to repay €150 million under the issuer term facility, and to close out cross-currency hedging arrangements related to certain of the redeemed notes.
The issuer is a holding and finance company underpinned by two investment grade-rated main assets, with a 75.1% stake (representing 100% of the voting rights) in Schaeffler AG and a 36% stake in Continental AG, both global manufacturing companies based in Germany.
| Issuer: | IHO Verwaltungs GmbH
|
| Securities: | Senior secured PIK toggle notes
|
| Joint global coordinators: | Citigroup Global Markets Inc. and Deutsche Bank Securities Inc.
|
| Joint bookrunners: | BofA Securities and HSBC Securities
|
| Trade date: | May 22
|
| Settlement date: | June 6
|
| Ratings: | Moody's: Ba1
|
| S&P: BB+
|
| Fitch: BB+
|
| Distribution: | Rule 144A and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Six-year notes
|
| Amount: | €800 million
|
| Cash coupon: | 3 5/8%
|
| PIK coupon: | 4 3/8%
|
| Price: | Par
|
| Yield: | 3 5/8%
|
| Spread: | 409 bs
|
| First call: | Make-whole call at Bunds plus 50 bps until May 15, 2021, then callable at 101.813
|
| Equity clawback: | 40% at 103.625 until May 15, 2021
|
| Price talk: | 3¾% area
|
| Lead: | Deutsche Bank (bill and deliver)
|
|
|
| Euro eight-year notes
|
| Amount: | €500 million
|
| Maturity: | May 15, 2027
|
| Cash coupon: | 3 7/8%
|
| PIK coupon: | 4 5/8%
|
| Price: | 98.324
|
| Yield: | 4 1/8%
|
| Spread: | 440 bps
|
| First call: | Make-whole call at Bunds plus 50 bps until May 15, 2022, the callable at 101.938
|
| Equity clawback: | 40% at 103.875 until May 15, 2022
|
| Price talk: | 4 1/8% area
|
| Lead: | Deutsche Bank (bill and deliver)
|
|
|
| Dollar eight-year notes
|
| Amount: | $450 million
|
| Maturity: | May 15, 2027
|
| Cash coupon: | 6%
|
| PIK coupon: | 6¾%
|
| Price: | Par
|
| Yield: | 6%
|
| Spread: | 367 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until May 15, 2022, then callable at 103
|
| Equity clawback: | 40% at 106 until May 15, 2022
|
| Price talk: | 6% area
|
| Lead: | Citigroup (bill and deliver)
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | May 15, 2029
|
| Cash coupon: | 6 3/8%
|
| PIK coupon: | 7 1/8%
|
| Price: | Par
|
| Yield: | 6 3/8%
|
| Spread: | 399 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until May 15, 2024, then callable at 103.188
|
| Equity clawback: | 40% at 106.375 until May 15, 2024
|
| Price talk: | 6 3/8% area
|
| Lead: | Citigroup (bill and deliver)
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
