Published on 10/4/2018 in the Prospect News High Yield Daily.
New Issue: Resideo prices $400 million eight-year notes at par to yield 6 1/8%
By Paul A. Harris
Portland, Ore., Oct. 4 – Resideo Funding Inc. priced a $400 million issue of eight-year senior notes (B1/BB+) at par to yield 6 1/8% on Thursday, according to market sources.
The yield printed at the tight end of yield talk in the 6¼% area.
The deal, related to Honeywell International Inc.'s spinoff of the Honeywell Home business, was quarterbacked by left bookrunner Goldman Sachs & Co. LLC.
J.P. Morgan Securities LLC, Barclays and BofA Merrill Lynch were the joint bookrunners.
Proceeds, along with proceeds from a concurrent term loan, will be used to repay a $1.2 billion intercompany note to Honeywell or a subsidiary of Honeywell, with any remaining proceeds to be used for general corporate purposes.
Resideo Funding is a special purpose vehicle of Resideo Technologies Inc., a Morris Plains, N.J.-based provider of critical comfort and security solutions primarily in residential environments.
| Issuer: | Resideo Funding Inc.
|
| Amount: | $400 million
|
| Maturity: | Nov. 1, 2026
|
| Securities: | Senior notes
|
| Left bookrunner: | Goldman Sachs & Co. LLC
|
| Joint bookrunners: | J.P. Morgan Securities LLC, Barclays, BofA Merrill Lynch
|
| Co-managers: | BBVA Securities Inc., BMO, BNP Paribas Securities Corp., Citizens Capital Markets Inc., KeyBanc Capital Markets LLC, MUFG, PNC Capital Markets LLC, Scotia Capital, SMBC Nikko Securities America Inc., SunTrust Robinson Humphrey Inc., TD Securities (USA) LLC, UniCredit, U.S. Bancorp Investments Inc.
|
| Coupon: | 6 1/8%
|
| Price: | Par
|
| Yield: | 6 1/8%
|
| Spread: | 269 bps
|
| First call: | Nov. 1, 2021 at 104.594
|
| Equity clawback: | 35% at 106.125 until Nov. 1, 2021
|
| Trade date: | Oct. 4
|
| Settlement date: | Oct. 19
|
| Ratings: | Moody's: B1
|
| S&P: BB+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 6¼% area
|
| Marketing: | Roadshow
|
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