Published on 9/21/2021 in the Prospect News High Yield Daily.
New Issue: Rocket Mortgage upsizes to $2 billion, prices notes in two parts
By Paul A. Harris
Portland, Ore., Sept. 21 – Rocket Mortgage, LLC priced an upsized $2 billion issue of senior notes (Ba1/BB+) in two tranches in a Tuesday drive-by, according to market sources.
The deal, which was upsized from $1.5 billion, included an upsized $1.15 billion tranche of five-year notes, which priced at par to yield 2 7/8%, at the tight end of yield talk in the 3% area. Initial guidance was in the low 3% area. The tranche size was increased from $750 million.
The deal also included an upsized $850 million tranche of 12-year notes, which priced at par to yield 4%, in the middle of yield talk in the 4% area. Initial guidance was in the low 4% area. The size of the 12-year notes tranche also increased from $750 million.
The deal was heard to be playing to $1 billion of reverse inquiry, a trader said.
Left bookrunner Morgan Stanley & Co. LLC will bill and deliver. Joint bookrunners were BofA Securities Inc., J.P. Morgan Securities LLC, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC.
The mortgage lender, which is based in Detroit, plans to use the proceeds to fund the tender offer and consent solicitation for $1.01 billion of its 5¼% senior notes due 2028 and for general corporate purposes.
| Issuers: | Rocket Mortgage, LLC and Rocket Mortgage Co-Issuer, Inc.
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| Amount: | $2 billion, increased from $1.5 billion
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| Securities: | Senior notes
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| Left bookrunner: | Morgan Stanley & Co. LLC (bill and deliver)
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| Joint bookrunners: | BofA Securities Inc., J.P. Morgan Securities LLC, Barclays, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, RBC Capital Markets LLC and UBS Securities LLC
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| Co-managers: | BMO Capital Markets Corp., CastleOak Securities LP, Fifth Third Securities Inc., Huntington Investment Co., Jefferies LLC, Nomura Securities International Inc., U.S. Bancorp Investments Inc. and Zelman
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| Trade date: | Sept. 21
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| Settlement date: | Oct. 5
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| Ratings: | Moody's: Ba1
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| S&P: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Drive-by
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| Five-year notes
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| Amount: | $1.15 billion, increased from $750 million
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| Maturity: | Oct. 15, 2026
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| Coupon: | 2 7/8%
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| Price: | Par
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| Yield: | 2 7/8%
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| Spread: | 204 bps
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| First call: | Oct. 15, 2023 at 101.438
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| Price talk: | 3% area
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| 12-year notes
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| Amount: | $850 million, increased from $750 million
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| Maturity: | Oct. 15, 2033
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| Coupon: | 4%
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| Price: | Par
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| Yield: | 4%
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| Spread: | 279 bps
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| First call: | Oct. 15, 2027 at 102
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| Price talk: | 4% area
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