Published on 6/27/2019 in the Prospect News High Yield Daily.
New Issue: Sirius Computer prices $300 million 11% eight-year notes at par
By Paul A. Harris
Portland, Ore., June 27 – Sirius Computer Solutions, Inc. priced a $300 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 11% on Thursday, according to market sources.
The yield printed 25 basis points beyond the wide end of the 10½% to 10¾% yield talk and well beyond initial price talk in the 10% area, a trader said.
The deal underwent covenant changes bearing primarily upon how the company may incur additional debt and disburse cash.
Citigroup Global Markets Inc. was the left bookrunner. Joint bookrunners were Credit Suisse Securities (USA) LLC, UBS Securities LLC, Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, ING, Macquarie, MUFG, Natixis Securities North America Inc., Nomura Securities Co. Ltd., RBC Capital Markets LLC and SunTrust Robinson Humphrey Inc.
Proceeds will be used to fund the leveraged buyout of Sirius Computer Solutions, a San Antonio-based provider of mission-critical IT infrastructure solutions, by Clayton, Dubilier and Rice from Kelso & Co.
| Issuer: | Granite Merger Sub 2, Inc. to be succeeded via merger by SCS Holdings I Inc. and Sirius Computer Solutions, Inc.
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| Amount: | $300 million
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| Maturity: | July 15, 2027
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| Securities: | Senior notes
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| Left bookrunner: | Citigroup Global Markets Inc.
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| Joint bookrunners: | Credit Suisse Securities (USA) LLC, UBS Securities LLC, Barclays, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, ING, Macquarie, MUFG, Natixis Securities North America Inc., Nomura Securities Co. Ltd., RBC Capital Markets LLC and SunTrust Robinson Humphrey Inc.
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| Coupon: | 11%
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| Price: | Par
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| Yield: | 11%
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| Spread: | 912 bps
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| First call: | Make-whole call at Treasuries plus 50 bps until July 15, 2022, then callable at 105.5
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| Equity clawback: | 40% at 111 until July 15, 2022
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| Trade date: | June 27
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| Settlement date: | July 1
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| Ratings: | Moody's: Caa1
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| S&P: CCC+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 10½% to 10¾%
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| Marketing: | Roadshow
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