By Paul A. Harris
Portland, Ore., April 30 – Lonza Specialty Ingredients placed two tranches of sustainability-linked high-yield notes on Friday, market sources said.
Herens Holdco Sarl priced $350 million of seven-year senior secured notes (B2/B) that priced at par, initially to yield 4¾%. The yield printed at the tight end of revised yield talk in the 4 7/8% area. Earlier talk was in the 5¼% area. Initial guidance was in the low 5% area.
Herens Midco Sarl priced €460 million of eight-year senior unsecured notes (Caa2/CCC+) at par, initially to yield 5¼%, at the tight end of revised yield talk in the 5 3/8% area. Earlier talk was in the 5½% area. Initial guidance was in the mid 5% area.
The notes in both tranches are subject to coupon step-ups (and ensuing call premium step-ups) based on the company's performance with respect to the sustainability-linked criteria in the bond indentures.
Deutsche Bank was the physical bookrunner. Joint bookrunners were Credit Suisse, RBC, Credit Agricole CIB, SG and UniCredit.
Proceeds plus CHF 1.8 billion equivalent of bank loans will be used to help fund the CHF 4.2 billion buyout of Lonza Specialty, a Basel, Switzerland-based specialty chemicals company, by Bain Capital Private Equity and Cinven.
| Company: | Lonza Specialty Ingredients
|
| Securities: | Sustainability-linked notes
|
| Physical bookrunner: | Deutsche Bank
|
| Joint bookrunners: | Credit Suisse, RBC, Credit Agricole CIB, SG and UniCredit
|
| Co-managers: | MUFG and NatWest
|
| Structuring advisers: | Deutsche Bank and UBS
|
| Trade date: | April 30
|
| Settlement date: | May 14
|
| Distribution: | Rule 144A and Regulation S
|
|
|
| Secured notes
|
| Issuer: | Herens Holdco Sarl
|
| Amount: | $350 million
|
| Maturity: | May 15, 2028
|
| Coupon: | 4¾%, subject to possible sustainability-linked performance step-ups
|
| Price: | Par
|
| Yield: | 4¾%, pending issuer’s sustainability-linked performance
|
| Spread: | 342 bps
|
| Initial call: | May 15, 2024 at 102.375
|
| Special call: | 10% of issue annually at 103 during non-call period
|
| Ratings: | Moody's: B2
|
| S&P: B
|
| Price talk: | 4 7/8% area, revised from 5¼% area
|
|
|
| Unsecured notes
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| Issuer: | Herens Midco Sarl
|
| Amount: | €460 million
|
| Maturity: | May 15, 2029
|
| Coupon: | 5¼%, subject to possible sustainability-linked performance step-ups
|
| Price: | Par
|
| Yield: | 5¼%, pending issuer's sustainability-linked performance
|
| Spread: | 563 bps
|
| Initial call: | May 15, 2024 at 102.625
|
| Special call: | 10% of issue annually at 103 during non-call period
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Price talk: | 5 3/8% area, revised from 5½% area
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