Macy's firms pricing for $850M, 2-part unsecured notes offering

Macy's Inc. has launched an evenly split $850 million, two-part offering of senior unsecured notes tight to guidance. The eight-year (non-call three-year) bonds will finalize at 5.875% and the 10-year (non-call five-year) tranche at 6.125%, according to market sources. Terms are expected in today's business via a Credit Suisse-led bookrunner group.

Earlier in the session, the shorter tenor was guided to clear with a 6%-6.25% yield, while the longer-dated paper was talked at 6.25%-6.50%.
Proceeds, together with cash on hand, will be used to redeem the company's 6.65% second-lien notes due 2024, 2.875% senior notes due 2023, 4.375% senior notes due 2023, 3.625% senior notes due 2024, and 6.65% senior notes due 2024 and for general corporate purposes, including to pay call premiums.

BofA Securities, US Bank, Wells Fargo, Fifth Third Bank, PNC Capital Markets and Goldman Sachs make up the full bookrunning group.

Both maturities are structured with a first call at par plus 50% of the coupon, an up to 40% equity claw for three years and a 101% investor put. Thus far, assigned issue ratings are BB/BBB- at S&P Global Ratings and Fitch.

Macy's is an omnichannel retailer. Its wholly owned subsidiary Macy's Retail Holdings LLC is the issuer for the bonds.

The company was last seen in the high-yield market in March 2021 when it priced a $500 million offering of 5.875% unsecured notes due April 2029. Those notes closed yesterday at 102.25, for a yield of 5.254%, according to data compiled by S&P Global Market Intelligence.