Verisure kicks off €4.4B debt recap with €2B term loan launch

Verisure Holding AB (publ) is out to market with a €2 billion, seven-year term loan B as part of a €4.42 billion debt recapitalization ahead of a lender meeting at 11 a.m. U.K. time on Jan. 8. BofA Securities is lead-left physical bookrunner alongside physical bookrunners Morgan Stanley and Nomura, and global coordinators Deutsche Bank, Goldman Sachs and J.P. Morgan. Replies are due by noon on Jan. 19.

The deal comes alongside the proposed issuance of up to €1.15 billion in other secured debt, up to €1.27 billion in unsecured debt, and an up-to-€700 million revolver. Together the deal will take out Verisure’s 2023 unsecured notes that comprise roughly €1 billion of 5.75% bonds and SEK1.65 billion (€160 million-equivalent) of S+575 notes, as well as the remainder of its term loan B1E due 2022, and pay a dividend.

In a statement this morning, Verisure said it had started a consent solicitation for its €200 million of FRNs due 2025 and €500 million of 3.5% secured notes due 2023. The solicitation amends the definition of IFRS to IFRS 15/16 for covenant calculation purposes and amends the ratio-based restricted payment permission provided the consolidated senior secured net leverage ratio does not exceed 5.5x to 1.0x on a pro-forma basis (from 5.25x to 1.0x). The process gets underway today (Jan. 7) and will expire at 4 p.m. London time on Jan. 13. Accounts are offered a consent fee of 25 basis points, and the requisite consent threshold is 50% plus 1. Leads comment that this will align these bonds with the existing indenture of the company's 2026 bonds and its new senior facilities agreement.

Secured ratings are expected to emerge at B/B2 with a stable outlook on both, according to the leads. Existing ratings are B/B2 (issuer), B/B1 (secured) and CCC+/Caa1 (unsecured).

Barclays, BNP Paribas, Credit Agricole CIB, Caixabank, Citi, Credit Suisse, Nordea and Santander make up the joint bookrunning group on the loan.

Verisure is backed by Hellman & Friedman, which first invested in the firm in 2011 before taking majority control in 2015. The firm was last seen in the market in July 2020 when it placed a €1.6 billion secured debt offering split equally between a E+400 term loan and a 3.875% bond, both due July 2026. In secondary the loan has been marked in a rough 100.25/100.875 market in the past few days, which is a touch stronger from levels seen in the final days of last year. The bond closed on January 6 at 102.934 to give a yield-to-worst of 2.99%, according to data compiled by S&P Global Market Intelligence.

July’s deal refinanced loans but still left Verisure with a rump of its TL-B1E that was last dusted over in November 2017 and pays E+300. That 2022 deal was quoted in a 99.625/100.25 market on Jan. 6.

Verisure is a provider of monitored fire and intrusion alarms, and is the largest provider of monitored alarm and security services to residential customers. It was previously known as Securitas Direct AB.