(ADDS details)
By Davide Scigliuzzo
NEW YORK, May 23 (IFR) - The unsecured bond pulled inNovember to help finance Carlyle's acquisition of Veritas hasbeen relaunched, a source close to the situation told IFR onMonday.
News of the revived deal came shortly after both Moody's andS&P assigned fresh ratings to the overall financing packagebacking Carlyle's purchase of Veritas from Symantec.
Sources told IFR that Morgan Stanley, lead-left on the bondwhen it was pulled, was pitching an unsecured US$825m bondaround 88 cents on the dollar to yield around 13%.
The coupon on the bond is 10.5%, the sources said.
"They are pitching hard," said one portfolio manager who wascontacted by the bank.
Morgan Stanley was not immediately available to comment.
Carlyle had originally planned to sell US$5.6bn of debtacross loans and bonds to finance the purchase of Veritas, adata storage company.
But amid a sell-off in junk bonds and questions aboutcovenant protections in the deal, the financing failed to clearthe market.
The structuring was reworked in January to give SymantecUS$1bn less in cash from the acquisition.
But Morgan Stanley and other underwriters of the package hadto take the debt onto their own balance sheets. When thefinancing was pulled, the unsecured bond was set to beUS$1.775bn-equivalent in size.
Average junk bond spreads have narrowed some 265bp sinceFebruary 11, but yields on riskier Triple C paper are still atfairly lofty levels of above 16%.
Both Moody's and S&P Global Ratings on Monday rated the newunsecured bond offering at Caa1 and CCC+ respectively.
There is also a secured portion of the bond financing of around US$700m-equivalent of 2023 issues, split between USdollar and euro tranches and carrying a coupon of 7.5%.
Morgan Stanley was pitching that part of the offering at adiscount of 90 to 92 cents to the dollar, for a yield of over9%, the sources said. It is not clear when that will berelaunched.
Some of the deal's original underwriters have already soldholdings to Carlyle at a steep discount, IFR reported earlierthis month.
Goldman Sachs recently cut its exposure, selling aroundUS$22.6m of the bonds at 83.5 cents to the dollar on April 20, asource close to the situation told IFR.
Bank of America Merrill Lynch was lead underwriter on theloan portion of the financing.
UBS and Jefferies also provided debt commitments from thestart, while Barclays, Citigroup, Credit Suisse and GoldmanSachs later joined the underwriting team with smaller roles. (Reporting by Davide Scigliuzzo; Writing by Marc Carnegie;Editing by Natalie Harrison)
Barclays (BARC)
