content

CDK Global makes fallen-angel debut with $500M of 10-year notes

CDK Global is pitching $500 million of 10-year (non-call five) notes via Bank of America Merrill Lynch, J.P. Morgan, Morgan Stanley, MUFG, USB, and Wells Fargo, sources said. Roadshows are scheduled to run Monday, May 8, through Wednesday, May 10, with pricing thereafter.

The offering is being guided with expected BB+/Ba1 ratings. Issuance will come under Rule 144A.

Proceeds will be used for general corporate purposes, which may include share repurchases, dividends, acquisitions, repayments of debt, and working capital and capital expenditures.

Last November, CDK Global became a fallen angel at the hands of both S&P Global Ratings and Moody’s.

Citing the “expectation for a more aggressive financial policy than previously stated,” S&P Global lowered its corporate and unsecured ratings for the borrower to BB+, from BBB–, while Moody’s bumped the company’s ratings to Ba1, from Baa3.

CDK Global (Nasdaq: CDK) provides integrated information-technology and digital-marketing solutions to the automotive retail and other industries worldwide. The company has an $8.98 billion market cap, and $1.59 billion of total debt, according to S&P Global Market Intelligence. The company’s debt load includes 3.3% notes due 2019 and 4.5% notes due 2024. — Jakema Lewis

Try LCD for Free! News, analysis, data

Follow LCD News on Twitter.

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

Fallen Angel Transocean Prices $1.25B High Yield Bond Offering

Transocean priced a downsized offering of seven-year notes late Thursday via joint bookrunners Morgan Stanley and Goldman Sachs, according to sources. The $1.25 billion of paper priced tighter than talk, and the structure was revised to non-call four, from non-call three, sources added. Transocean will use the proceeds to fund tender offers for its 6.5% notes due 2020, 6.375% notes due 2021, and 3.8% notes due 2022, and for general corporate purposes. Terms:

Issuer Transocean
Ratings BB-/B1
Amount $1.25 billion
Issue unsecured (Rule 144A-for-life)
Coupon 9.000%
Price 97.50%
Yield 9.499%
Spread T+829
Maturity July 15, 2023
Call nc4 @ par+50% coupon
Trade July 7, 2016
Settle July 21, 2016 (T+10)
Joint bookrunners MS/GS
Price talk 9% at 98-99% OID
Notes The deal was scaled down from $1.5 billion; redemption was revised to non-call four, from non-call three.

Follow LCD News on Twitter

This story first appeared on www.lcdcomps.com, an offering of S&P Global Market Intelligence. LCD’s subscription site offers complete news, analysis and data covering the global leveraged loan and high yield bond markets. You can learn more about LCD here.

content

S&P: Financials Top List of 2016 Fallen Angels (and ‘Potential’ Fallen Angels)

global fallen angels financials

Financial institutions – which were battered especially hard after Great Britain’s Brexit vote on Thursday – might find a relatively rough road ahead for the rest of 2016, in terms of credit downgrades.

According to S&P, a full 25% of ‘potential fallen angels’ globally – 17 of 68 – hail from the financial sector. Of that number, 10 are from the U.S.

‘Potential fallen angels’ are issuers rated BBB- with either negative outlooks or ratings on CreditWatch with negative implications.

“Negative outlooks and CreditWatch negative placements are good leading indicators of downgrades because they are strong predictors of rating actions in the aggregate and when broken out by rating category, region, or sector,” according to S&P. “Hence, the financial institutions sector may play a strong role in future downgrades.” – Tim Cross

The full Fallen Angel analysis is available to S&P Global Fixed Income Research subscribers here. It was written by Diane Vazza, Sudeep Kesh, and Gregg Moskowitz

Follow LCD News and S&P Global Market Intelligence on Twitter