ADT downsizes to $1.5 billion, withdraws unsecured notes, sets talk for two-part secured offering

By Paul A. Harris

Portland, Ore., March 21 – ADT Corp. downsized its notes offering to $1.5 billion from $2.75 billion as it withdrew a proposed $1.25 billion tranche of eight-year senior unsecured notes, according to market sources.

The remaining first priority senior secured notes (Ba3/BB-) come in two evenly split tranches.

A $750 million tranche of five-year secured notes comes with price talk in the 5¼% area. Initial talk was in the 5½% area.

A $750 million tranche of seven-year secured notes is talked in the 5¾% area. Initial talk was in the 6% area.

Pricing is expected on Thursday.

The withdrawn $1.25 billion tranche of unsecured notes had been talked at 7½% to 7¾%.

Deutsche Bank Securities Inc., Barclays, Citigroup Global Markets Inc. and RBC Capital Markets LLC are the joint bookrunners.

The Boca Raton, Fla.-based security services company plans to use the proceeds from the Rule 144A for life notes to refinance its 9¼% second-priority senior notes due 2023 and to repay $500 million of term loans outstanding under its credit agreement.

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