Investors Propose Changes to Terms for $1.95B PIK Toggle Note Offering From Global Aircraft Leasing, Request Better Yield, Tighter RP Baskets

Michael Haley, Harvard Zhang High-yield bond market participants are pushing back on key terms for an almost $2 billion offering of PIK notes from co-issuers aircraft lessor Global Aircraft and shipping container lessor Seaco, with changes on the deal expected to be announced shortly, sources considering the financing said. A group of potential investors approached lead arranger Morgan Stanley late last week with a list of their proposed changes, the sources said. Investors are asking for a higher implied yield for the transaction, and updated price talk is now coming with an 11.5% cash coupon or 13.5% PIK coupon with a 4 point OID at 96, sources said. This is wider than initial whispers on the deal, which were a cash coupon of 11% or a PIK coupon of 13%. Pricing is expected Wednesday, Oct. 18, with proceeds earmarked to refinance $1.911 billion of Global Aircraft’s 6.5% cash/7.25% senior PIK toggle notes due September 2024, sources noted. The $1.95 billion five-year senior PIK toggle note offering has not generated the expected level of support from investors, the sources said, noting that the order book on the deal is at about $1 billion as of today. Reorg last week noted that[...]