JELD-WEN offers to swap 2027 notes for first-lien debt due 2031

what happened

JELD-WEN has started an offer to exchange its 4.875% notes due 2027 for new first-lien notes maturing in 2031, and is seeking holder consents. Up to $410.2 million of new notes will be offered to participants, and the offer is backed by commitments from major holders.

According to TradingView, citing a PR Newswire press release, 94.5% of holders have already agreed to tender their notes early, and 70.0% of the new notes are covered by a backstop. The new notes will carry a coupon of 10.5% to 11.5%. A Dutch auction for the term loan has also been launched.

why it matters

The deal aims to reduce refinancing risk over the coming years, but a higher coupon and extra collateral will make borrowing more expensive and raise secured leverage. The results of the exchange and the loan auction will show how strongly the market backs the company's plan.

market impact

JELD-WEN bonds: longer maturities cut refinancing risk, but the high coupon weighs on cash flow

• ↔JELD-WEN bonds mixed — longer maturity cuts refinancing risk, but a 10.5-11.5% coupon raises borrowing costs

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