The clock is ticking down on UK online gambling company 888 Holding's two-part senior secure high-yield bond, which was launched last week to finance the purchase of William Hill's international assets.
Market participants expect it to price this week, with bankers likely under pressure get the bond shifted before Friday, when US trading desks are expected to finish early ahead of the Fourth of July celebrations on Monday.
"Time's running out," an investor said.
Lead underwriters are targeting a yield of over 10%, to be obtained through an OID. The euro benchmark five-year non-call two fixed-rate tranche is expected to carry a 7% coupon, while price whispers for the benchmark-sized six-year non-call one floating-rate euro tranche are Euribor plus 550bp, targeting a 7.5% interest which will be bumped up to around 10.5% through the low 90s OID, according to a source.
The proceeds from 888's benchmark-sized deal will be used to partly fund a £1.776bn financing package backing the London-listed online gaming group's purchase of the non-US operations of William Hill and Mr Green, as well as to repay some of the former party's debt.
The financing package is split between the new euro notes, to raise £1.017bn-equivalent, and a US$500m term loan B, which was launched last Friday. There is also a £401m-equivalent term loan A in euros and a £358m delayed-draw term loan A.
"It'll be an expensive exercise for [888] to issue, not because of the business but the market context," said the investor, adding that it is difficult to gauge how much demand there will be for each debt product, given the multiple layers involved in the financing package.
The bond issue ratings are B1/B/BB+.
The acquisition from US-based owner Caesars Entertainment is expected to be finalised on July 1.