Published on 3/14/2019 in the Prospect News Investment Grade Daily.
New Issue: KLA-Tencor details $1.2 billion two-part sale of senior notes
By Cristal Cody
Tupelo, Miss., March 14 – KLA-Tencor Corp. priced a $1.2 billion two-part offering of senior notes (Baa1/BBB/BBB+) on the tight side of guidance and better than initial talk, according to a market source and additional deal details in an FWP filing with the Securities and Exchange Commission.
The company sold $800 million of 4.1% 10-year notes at a spread of 155 basis points over Treasuries, or 99.522 to yield 4.159%.
A $400 million tranche of 5% 30-year notes were placed with a Treasuries plus 205 bps spread. The notes priced at 99.278 to yield 5.047%.
J.P. Morgan Securities LLC was the active bookrunner.
Proceeds will be used to partially refinance existing debt.
The company announced on Jan. 10 that it intends to change its name to KLA Corp. effective in July 2019.
KLA-Tencor is a Milpitas, Calif.-based semiconductor equipment developer.
| Issuer: | KLA-Tencor Corp.
|
| Amount: | $1.2 billion
|
| Description: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC (active); Citigroup Global Markets Inc., BofA Merrill Lynch, MUFG and Wells Fargo Securities, LLC
|
| Senior co-managers: | Academy Securities, Inc., BB&T Capital Markets, ICBC Standard Bank plc, Loop Capital Markets LLC, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey, Inc., U.S. Bancorp Investments, Inc. and Williams Capital Group, LP
|
| Trade date: | March 13
|
| Settlement date: | March 20
|
| Ratings: | Moody’s: Baa1
|
| S&P: BBB
|
| Fitch: BBB+
|
| Distribution: | SEC registered
|
|
|
| 10-year notes
|
| Amount: | $800 million
|
| Maturity: | March 15, 2029
|
| Coupon: | 4.1%
|
| Price: | 99.522
|
| Yield: | 4.159%
|
| Spread: | Treasuries plus 155 bps
|
| Call features: | Make-whole call before Dec. 15, 2028 at Treasuries plus 25 bps; thereafter at par
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 160 bps area, plus or minus 5 bps; initial talk at Treasuries plus 180 bps area
|
|
|
| 30-year notes
|
| Amount: | $400 million
|
| Maturity: | March 15, 2049
|
| Coupon: | 5%
|
| Price: | 99.278
|
| Yield: | 5.047%
|
| Spread: | Treasuries plus 205 bps
|
| Call features: | Make-whole call before Sept. 15, 2048 at Treasuries plus 30 bps; thereafter at par
|
| Change-of-control put: | 101%
|
| Price guidance: | Treasuries plus 210 bps area, plus or minus 5 bps; initial talk at Treasuries plus 235 bps area
|
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