By Paul A. Harris
Portland, Ore., July 6 – Neogen Corp. priced a $350 million issue of eight-senior notes (B2/BB) at par to yield 8 5/8% on Wednesday, according to market sources.
The yield came at the tight end of yield talk in the 8¾% area. Initial guidance was in high 8% area.
The deal was 2.5-times oversubscribed, according to a sellside source, who added that the new Neogen 8 5/8% notes due 2030 broke sharply higher on the break, trading briefly above 102 before easing to around 101¾ bid heading into the close.
Goldman Sachs & Co. LLC was the left bookrunner. J.P. Morgan Securities LLC was joint bookrunner.
The notes were sold via Garden SpinCo Corp.
The notes will be issued to 3M in connection with a debt-for-debt exchange. Neogen will not receive any proceeds.
Last December Neogen, a Lancing, Mich.-based food safety company, announced it would form a combination with 3M's Food Safety Business.
The notes will be subject to a special mandatory redemption at par if the transaction does not occur by March 13, 2023.
| Issuer: | Garden SpinCo Corp.
|
| Amount: | $350 million
|
| Issue: | Senior notes
|
| Maturity: | July 20, 2030
|
| Left bookrunner: | Goldman Sachs & Co. LLC
|
| Joint bookrunner: | J.P. Morgan Securities LLC
|
| Coupon: | 8 5/8%
|
| Price: | Par
|
| Yield: | 8 5/8%
|
| Spread: | 576 bps
|
| Call protection: | Five years
|
| Trade date: | July 6
|
| Settlement date: | July 20
|
| Ratings: | Moody's: B2
|
| S&P: BB
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 8¾% area
|
| Marketing: | Roadshow
|
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