By Paul A. Harris
Portland, Ore., Feb. 1 – Copeland, the climate technologies business in which Blackstone acquired a majority stake from Emerson Electric Co. last year, completed an upsized $700 million equivalent two-part placement of senior secured notes due Dec. 15, 2030 (Ba3/BB-/BB+) on Thursday, according to market sources.
The deal, which was upsized from $500 million equivalent, came in two add-on tranches to EMRLD Borrower LP and Emerald Co-Issuer Inc. notes that were issued last May in support of the Blackstone deal.
An upsized $500 million tap of the dollar-denominated 6 5/8% notes priced at 100.75, with a 6.486% yield to maturity. The tap size increased from $450 million. The issue price came at the rich end of the 100.5 to 100.75 price talk but toward the cheap end of the 100.5 to 101 initial guidance.
A €230 million tap of the euro-denominated 6 3/8% notes priced at 104.25, with a 5.618% yield to maturity. The issue price came at the rich end of the 104 to 104.25 price talk. Initial guidance of 103.5 to 104.
Barclays was the left bookrunner. Joint bookrunners were RBC Capital Markets LLC, Wells Fargo Securities LLC, SMBC Nikko Securities America Inc., BXCM, Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Truist Securities Inc., BofA Securities Inc., MUFG Securities Americas Inc., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Regions Securities LLC, Fifth Third Securities Inc. and U.S. Bancorp Investments Inc.
The company intends to use the proceeds, including the incremental proceeds resulting from the $200 million equivalent upsize, to refinance a portion of its outstanding term loan B facility and for general corporate purposes.
Copeland is a manufacturer of mission critical, highly engineered heating, ventilation, air conditioning and refrigeration components.
| Issuers: | EMRLD Borrower LP and Emerald Co-Issuer Inc.
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| Amount: | $700 million equivalent, increased from $500 million equivalent
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| Issue: | Senior secured notes
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| Maturity: | Dec. 15, 2030
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| Left bookrunner: | Barclays (bill and deliver)
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| Joint bookrunners: | RBC Capital Markets LLC, Wells Fargo Securities LLC, SMBC Nikko Securities America Inc., BXCM, Goldman Sachs & Co. LLC, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Mizuho Securities USA Inc., Truist Securities Inc., BofA Securities Inc., MUFG Securities Americas Inc., Scotia Capital (USA) Inc., TD Securities (USA) LLC, CIBC World Markets Corp., Regions Securities LLC, Fifth Third Securities Inc. and U.S. Bancorp Investments Inc.
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| Trade date: | Feb. 1
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| Settlement date: | Feb. 6 with accrued interest
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| Ratings: | Moody’s: Ba3
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| S&P: BB-
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| Fitch: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Roadshow
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| Dollar notes add-on
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| Amount: | $500 million
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| Coupon: | 6 5/8%
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| Price: | 100.75
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| Yield to maturity: | 6.486%
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| Spread: | 267 bps
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| First call: | June 15, 2026 at 103.313
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| Price talk: | 100.5 to 100.75
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| Original issue: | $2.275 billion priced in May 2023
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| Euro notes add-on
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| Amount: | €230 million
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| Coupon: | 6 3/8%
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| Price: | 104.25
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| Yield to maturity: | 5.618%
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| Spread: | 359 bps
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| First call: | June 15, 2026 at 103.188
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| Price talk: | 104 to 104.25
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| Original issue: | €455 million priced in May 2023
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