Published on 5/26/2016 in the Prospect News High Yield Daily.
New Issue: Cengage prices downsized $620 million eight-year notes at par to yield 9½%
By Paul A. Harris
Portland, Ore., May 26 – Cengage Learning, Inc. priced a downsized $620 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 9½% on Thursday, according to a syndicate source.
The yield printed at the wide end of the upwardly revised 9¼% to 9½% yield talk. Earlier talk was for a yield of 9% to 9¼%.
Morgan Stanley & Co. LLC, Credit Suisse Securities (USA) LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co., Wells Fargo Securities LLC, Deutsche Bank Securities Inc. and KKR Capital Markets LLC were the joint bookrunners.
The issue size was decreased from $640 million after having previously been decreased from $740 million. The concurrent term loan was upsized to $1.71 billion from $1.59 billion.
The Boston-based educational content, technology and services company plans to use the proceeds to retire its existing term loan and pay a special dividend to the shareholders.
| Issuer: | Cengage Learning, Inc.
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| Amount: | $620 million, decreased from $640, after having previously downsized from $740 million
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| Maturity: | June 15, 2024
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| Securities: | Senior notes
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| Bookrunners: | Morgan Stanley Senior Funding, LLC, Credit Suisse Securities USA LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc., Goldman Sachs & Co., Wells Fargo Securities, LLC, Deutsche Bank Securities Inc., KKR Capital Markets LLC
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| Coupon: | 9½%
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| Price: | Par
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| Yield: | 9½%
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| Call: | Make-whole call at Treasuries plus 50 bps until June 15, 2019, then callable at 107.125
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| Trade date: | May 26
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| Settlement date: | June 7
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| Ratings: | Moody’s: Caa1
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| Standard & Poor’s: CCC+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 9¼% to 9½%, revised from 9% to 9¼%
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| Marketing: | Roadshow
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