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Nuveen Investments Inc., the asset manager owned by Madison Dearborn Partners LLC, plans to sell $1.145 billion in bonds as soon as next week and to obtain a $435 million loan.
Proceeds from the bond sale will be used to redeem the Chicago-based investment firm’s $935 million of 10.5 percent, unsecured notes due in November 2015 and to increase cash on its balance sheet, according to a person familiar with the offering. The debentures may be rated Caa2 by Moody’s Investors Service and CCC by Standard & Poor’s, both eight-levels below investment grade, said the person, who asked not to be identified because terms aren’t set.
The company plans to sell $400 million in five-year notes and $745 million in eight-year debentures.
“While Nuveen currently has no significant debt maturities before 2015, positive trends in the markets and the continued strength of our business fundamentals have enabled us to opportunistically seek to further extend our maturity profile and look to refinance our debt at attractive long-term rates.” Kristyna Munoz, a spokeswoman for Nuveen, said in an e-mailed statement.
The 2015 notes traded at 101.9 cents on the dollar to yield 9.79 percent Aug. 22, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Deutsche Bank AG, Bank of America Corp., Morgan Stanley, Royal Bank of Canada, UBS AG and Wells Fargo & Co. are managing the bond sale, the person said.
The company is seeking a $435 million add-on term loan, according to a person with knowledge of the transaction.
Proceeds will be used to provide more financial flexibility and extend the company’s maturity profile, said the person, who asked not to be identified because the information is private.
The debt, due in May 2017, will pay interest at 5.5 percentage points more than the London interbank offered rate and will be sold at 99 cents to 99.5 cents on the dollar, said the person. The so-called original-issue discount reduces proceeds for the borrower and increases the yield for investors.
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