NEW YORK, June 19 (IFR) - National Financial Partners Corp
was the only issuer to brave the US funding markets Wednesday,
testing the waters while other issuers stayed on the sidelines
ahead of the highly anticipated Federal Reserve statement later
in the day.
NFP, a wealth management advisory firm, downsized
its deal to USD300m from an initial USD337m, planning to use the
junk-rated debt as part of a USD1.2bn financing package to fund
a leveraged buyout of the company by private equity firm Madison
Meanwhile the term loan B was upsized by the same amount, to
USD753m from USD716m. There is also a USD135m revolver.
NFP's decision to take on a potentially volatile session
raised some eyebrows. It was the only bond trade announced in
the US capital markets Wednesday, with issuers holding back due
to uncertainty surrounding what the Fed will do next about
quantitative easing - worries that have wreaked havoc on the
markets in recent weeks and sent Treasury yields spiking.
"It is curious timing, but this is something that has
specific use of proceeds and likely needs to settle by a certain
time," said one leveraged finance banker.
"It's financing that needs to get done. There's no other
reason to tackle the market with the Fed."
But sources told IFR that, with price talk of 8.75% to 9%
out on the Triple C rated bond, the deal will clearly be less
sensitive to Fed-related volatility.
"If it was a higher quality name that was talking at a yield
below five percent, the Fed equation might be more important for
investors," the banker said.
The company held an extensive investor roadshow over the
past week to sell the bonds ahead of today's shareholder vote on
the proposed LBO by Madison Dearborn.
"When you work in acquisition financing," said a banker
familiar with the deal, "you don't hang around to see what
Though he conceded that some investors have abstained on
fear of more volatility following the Fed announcement, the deal
is reportedly largely pre-placed.
"There are a lot of investors that see value at these higher
levels," the banker said.
The eight-year non-call three senior notes are being led by
joint bookrunners Deutsche Bank, Morgan Stanley, UBS, CS, MCS
Capital Markets and RBS.
NFP increased pricing on its loan, with the seven-year term
loan B now guided at Libor plus 425 basis points, with a one
percent Libor floor and a 99 area issue price.
NFP announced the LBO in April with Madison Dearborn paying
USD25.35 per share of NFP common stock.
Additionally, Madison Dearborn affiliates have committed to
a USD385.4m cash investment.