Patagonia Holdco withdraws $500 million notes offering, upsizes loan

By Paul A. Harris

Portland, Ore., Aug. 5 – Patagonia Holdco LLC withdrew from the market a struggling $500 million offering of seven-year senior secured first-lien notes (B1/B+) and shifted the proceeds to its concurrent bank loan, according to market sources.

Early on, the deal backing Stonepeak’s $2.7 billion acquisition of Lumen Technologies' Latin American operations was guided with a 7˝% coupon at a deep discount in the 86 area. However, as the deal failed to gain traction a significantly deeper price discount in the low 80s was contemplated, sources said.

Dealers also slashed pricing on the concurrent term loan, which was upsized to $1.3 billion from $800 million. The loan, which came with a spread of SOFR plus 575 basis points, priced at 82, down from earlier discount talk of 90.

The bond deal, which came with an emerging markets cache, initially attracted some interest among high-yield investors who were facing an empty new issue calendar and a primary market that had been running on fumes since early June, sources said.

However, a considerable amount of that high-yield interest bled away during the time the deal was in the market, they added.

JPMorgan was the lead on both the notes and the loan.

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