Published on 2/4/2020 in the Prospect News High Yield Daily.
New Issue: Arconic prices upsized $600 million eight-year secured notes at par to yield 6 1/8%
By Paul A. Harris
Portland, Ore., Feb. 4 – Arconic Inc. priced an upsized $600 million issue of eight-year second-lien secured notes (Ba3/B+/BB+) at par to yield 6 1/8% on Tuesday, according to market sources.
The yield printed 12.5 basis points tighter than the 6¼% to 6½% yield talk. Earlier guidance was in the 6½% area.
The deal size increased from $400 million, as the company shifted $200 million to the bonds from its concurrent term loan.
Goldman Sachs & Co. LLC was the left bookrunner. Joint bookrunners were J.P. Morgan Securities LLC and Citigroup Global Markets Inc.
The Pittsburgh-based company plans to use the proceeds in connection with Arconic’s previously announced plan to separate into two stand-alone, publicly traded companies and for general corporate purposes.
The issuing entity is Arconic Rolled Products Corp., which is a wholly owned subsidiary of Arconic, a producer of aluminum sheet and plate products for the aerospace, automotive, commercial transportation, brazing and industrial markets.
| Issuer: | Arconic Rolled Products Corp.
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| Amount: | $600 million, increased from $400 million
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| Maturity: | Feb. 15, 2028
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| Securities: | Second-lien secured notes
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| Left bookrunner: | Goldman Sachs & Co. LLC
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| Joint bookrunners: | J.P. Morgan Securities LLC and Citigroup Global Markets Inc.
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| Senior managers: | ABN Amro Inc., BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Fifth Third Securities Inc., Mizuho Securities USA Inc., PNC Capital Markets LLC, SMBC Nikko Securities America Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC and U.S. Bancorp Investments Inc.
|
| Co-managers: | Citizens Capital Markets Inc., ICBC Standard Bank plc, ING Financial Markets LLC, Nomura Securities International Inc., Siebert Williams Shank & Co. LLC, Standard Chartered and Huntington Investment Co.
|
| Coupon: | 6 1/8%
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| Price: | Par
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| Yield: | 6 1/8%
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| Spread: | 457.2 bps
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| Call protection: | Three years
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| Trade date: | Feb. 4
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| Settlement date: | Feb. 7
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| Ratings: | Moody's: Ba3
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| S&P: B+
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| Fitch: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 6¼% to 6½%
|
| Marketing: | Roadshow
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