Published on 2/2/2021 in the Prospect News High Yield Daily.
New Issue: Rackspace prices $550 million 3½% seven-year secured notes at par
By Paul A. Harris
Portland, Ore., Feb. 2 – Rackspace Technology Global Inc. priced a $550 million issue of seven-year senior secured notes (B1/B+) at par to yield 3½% in a Tuesday drive-by, according market sources.
The yield printed at the tight end of the 3½% to 3¾% price talk. Initial talk was 3½% to 3¾%.
Citigroup Global Markets Inc. was the lead bookrunner. Joint bookrunners were Barclays, BMO Capital Markets Corp., MUFG, J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc.
The Windcrest, Tex.-based end-to-end multicloud technology services provider plans to use the proceeds plus a $2.3 billion first-lien term loan to pay off its existing term loan B.
Tranche sizes of the refinancing changed prior to the launch of the notes when Rackspace shifted $100 million of proceeds to a new term loan from the notes offering, increasing the loan to $2.3 billion from $2.2 billion and decreasing the notes to $550 million from the previously planned $650 million, according to market sources.
| Issuer: | Rackspace Technology Global, Inc.
|
| Amount: | $550 million
|
| Maturity: | Feb. 15, 2028
|
| Securities: | Senior secured notes
|
| Lead bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | Barclays, BMO Capital Markets Corp., MUFG, J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, Mizuho Securities USA Inc., RBC Capital Markets LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc.
|
| Co-manager: | Apollo Global Securities LLC
|
| Coupon: | 3½%
|
| Price: | Par
|
| Yield: | 3½%
|
| Spread: | 272 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2024, then callable at 101.75
|
| Trade date: | Feb. 2
|
| Settlement date: | Feb. 9
|
| Ratings: | Moody's: B1
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 3½% to 3¾%
|
| Marketing: | Drive-by
|
|
|
© 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.
