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Arconic starts roadshow for $900 million seven-year secured notes; initial talk 8¾%-9% area
By Paul A. Harris
Portland, Ore., July 24 – Arsenal AIC Parent LLC began a roadshow on Monday for a $900 million offering of seven-year senior secured notes (Ba3/B+/BB+) backing the buyout of Arconic Corp., according to market sources.
The deal, which was set to kick off on a Monday morning conference call with investors, is in the market with initial talk in the 8¾% to 9% area, according to a sellside source.
There is $2.1 billion of reverse inquiry in the secured notes at or inside of 9%, the sellsider said.
The Rule 144A and Regulation S for life notes have their first call after three years at par plus 50% of the coupon.
Wells Fargo Securities LLC is the left bookrunner. J.P. Morgan Securities LLC, Apollo Global Securities LLC, BMO Capital Markets Corp., Mizuho Securities USA Inc., TD Securities (USA) LLC, Citigroup Global Markets Inc.; Citizens Capital Markets Inc., Fifth Third Securities Inc., Standard Chartered Bank and Truist Securities Inc. are the joint bookrunners.
The notes are set to price later in the July 24 week concurrently with a $1 billion term loan, which is also part of the financing for the Arconic acquisition.
In addition to the secured notes and the term loan, the financing also includes $725 million of senior unsecured notes, which are all being taken down by sponsor Apollo Global Management. Initial guidance on the unsecured notes has them pricing 300 basis points to 350 bps behind the secured notes.
Proceeds plus $2.3 billion of common equity will be used to fund the acquisition of Arconic, a Pittsburgh-based provider of aluminum architectural products, by Apollo Global Management and Irenic.
The acquisition, which has an enterprise value of approximately $5.2 billion, is expected to close during the second half of this year.
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