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Presidio shelves $400M high yield bond offering amid insufficient investor demand

Presidio this morning postponed its $400 million offering of senior notes backing its purchase by Apollo Global Management from American Securities due to insufficient demand at price talk, according to sources.

This is the second postponed deal of the year after Koppers withdrew its $400 million, five-year offering last week. Last year, 17 deals were postponed for a total of $5.825 billion, with the bulk occurring between September and December.

Presidio, via issuing entity Aegis Merger Sub, had emerged last Wednesday with talk of 10.75-11%, inclusive of its OID, on its eight-year (non-call three) offering, which was well wide of initial thoughts in the low 9% range, sources had indicated.

Barclays (B&D), Credit Suisse, Citi, Goldman Sachs, and RBC were joint bookrunners, joined by co-managers Apollo and Natixis.

Ratings on the offering had been assigned at CCC+/Caa1. Additionally, S&P assigned a 6 recovery rating to the issue. Note the deal came with a larger-than-typical equity clawback of up to 40% for the first three years at par plus the coupon.

Last Wednesday, arrangers on the concurrent loan revised pricing upward. The $600 million seven-year covenant-lite term loan was widened to L+575, offered at 97, from L+475, with a 1% LIBOR floor, and offered at 99. The financing also includes a $50 million revolver. The loan is allocating today, sources said.

Presidio, an IT infrastructure-solutions provider for approximately 6,000 clients across the U.S., assists clients in designing, procuring, implementing, and managing IT infrastructures that deliver tangible business value. – Joy Ferguson