By Paul A. Harris
Portland, Ore., July 27 – Arsenal AIC Parent LLC priced a downsized $700 million issue of seven-year senior secured notes (Ba3/B+/BB+) at par to yield 8% on Thursday, according to market sources.
The deal, backing the buyout of Arconic Corp., was downsized from $900 million.
The yield came 25 basis points tighter than yield talk of 8¼% to 8½% and well inside of the early guidance of 8¾% to 9%.
Wells Fargo Securities LLC is the left bookrunner. Joint bookrunners are J.P. Morgan Securities LLC, Apollo Global Securities, LLC, BMO Capital Markets Corp., Mizuho Securities USA LLC, TD Securities (USA) LLC, Citigroup Global Markets Inc., Citizens Capital Markets, Inc., Fifth Third Securities, Inc., Standard Chartered Bank and Truist Securities, Inc.
The bond portion of the financing also includes a tranche of senior unsecured notes, which was downsized to $500 million from $725 million.
The unsecured notes are all being taken down by sponsor Apollo Global Management.
With the shift of proceeds from both tranches of bonds to the bank portion of the financing, the concurrent term loan B upsized to $1.425 billion from $1 billion.
Proceeds from the secured and unsecured notes, the term loan 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 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.
| Issuer: | Arsenal AIC Parent LLC
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| Amount: | $700 million, decreased from $900 million
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| Issue: | Senior secured notes
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| Maturity: | Oct. 1, 2030
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| Left bookrunner: | Wells Fargo Securities, LLC
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| Joint bookrunners: | J.P. Morgan Securities LLC, Apollo Global Securities, LLC, BMO Capital Markets Corp., Mizuho Securities USA LLC, TD Securities (USA) LLC, Citigroup Global Markets Inc., Citizens Capital Markets, Inc., Fifth Third Securities, Inc., Standard Chartered Bank and Truist Securities, Inc.
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| Coupon: | 8%
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| Price: | Par
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| Yield: | 8%
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| Spread: | 396 bps
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| First call: | Oct. 1, 2026 at 104
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| Trade date: | July 27
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| Settlement date: | Aug. 10
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| Ratings: | Moody’s: Ba3
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| S&P: B+
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| Fitch: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 8¼% to 8½%
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| Marketing: | Roadshow
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