Edgewell Personal Care guides $500M bond offering

Price talk is set at 4%-4.25% for Edgewell Personal Care Co.'s proposed $500 million of eight-year senior notes, sources said. Books for the deal will close today at 2 p.m. ET, with final terms to follow via joint bookrunners BofA Securities (left), Barclays, MUFG, TD Securities and Goldman Sachs.

The proposed new issue will be non-callable for three years, with a first call at par plus 50% of the coupon. Additionally, the notes will include an up-to-40% equity claw at par plus the coupon for the first three years.

Proceeds of the notes will be combined with cash on hand to redeem the company's $500 million of existing 4.7% senior notes due 2022.

In addition to the to-be-redeemed 2022 bond maturity, the company also has an outstanding $750 million tranche of 5.5% senior notes due 2028, which were placed in May 2020 and closed yesterday at 106.75, yielding 2.42%, according to S&P Global Market Intelligence.

Edgewell Personal Care Co. manufactures and markets personal care products in the wet shave, sun and skin care, and feminine care categories in the United States and internationally.

S&P Global Ratings today assigned its BB issue-level rating and 3 recovery rating to the proposed debt. Ratings noted it has a negative outlook on Edgewell, which reflects the company's weakened credit metrics following its recent acquisition of Cremo and the potential that the agency will lower its rating if the company sustains leverage of over 4x due to more aggressive financial policies or potentially sustained weak economic conditions following the COVID-19 pandemic.

Moody's has assigned a Ba3 rating to the unsecured debt, while noting, "The offering is credit positive because it extends the maturity profile, reduces cash interest expense, while financial leverage is unaffected." The agency's outlook on the company is stable.