By Paul A. Harris
Portland, Ore., Aug. 25 – IPL Plastics Inc. priced an upsized $485 million issue of eight-year senior secured notes (B3/B) at par to yield 6% on Tuesday, according to market sources.
The issue size increased from $450 million.
The yield printed at the tight end of the 6% to 6¼% yield talk. Initial guidance had the notes coming to yield in the high 6% area to 7%.
The deal played to high demand, according to a bond trader, who added that there were $4.2 billion of orders in the book around noon ET on Tuesday.
A revision to the structure saw call protection decreased to two years from three years.
The deal backs the acquisition of the Montreal-based rigid plastic packaging manufacturer by Madison Dearborn Partners, LLC.
BofA, Barclays, Deutsche Bank, BMO, CIBC, Credit Suisse, MUFG, RBC and TD were the joint bookrunners.
The notes were sold via Intelligent Packaging Ltd. Finco Inc. and Intelligent Packaging Ltd. Co-Issuer, LLC.
Proceeds, together with cash on hand, equity contributions from funds affiliated with Madison Dearborn and the reinvestment of certain proceeds by Caisse de depot et placement du Quebec, are intended to be used to consummate the acquisition. The additional proceeds resulting from the $35 million upsizing of the deal will used to reduce the sizes of the equity contribution and the reinvestment.
On July 29, IPL Plastics announced that it was being taken private by Madison Dearborn, which is purchasing the company’s shares in a transaction valued at C$555 million on an equity basis and C$981 million on an enterprise basis.
| Issuers: | Intelligent Packaging Ltd. Finco Inc. and Intelligent Packaging Ltd. Co-Issuer, LLC
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| Amount: | $485 million, increased from $450 million
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| Maturity: | Sept. 15, 2028
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| Securities: | Senior secured notes
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| Bookrunners: | BofA, Barclays, Deutsche Bank, BMO, CIBC, Credit Suisse, MUFG, RBC and TD
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| Coupon: | 6%
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| Price: | Par
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| Yield: | 6%
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| Spread: | 544 bps
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| Call protection: | Two years, decreased from three years
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| Trade date: | Aug. 25
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| Settlement date: | Sept. 11
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| Ratings: | Moody's: B3
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| S&P: B
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 6% to 6¼%
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| Marketing: | Roadshow
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