CBRE Group Inc. priced $1 billion of senior notes in two tranches, tapping the investment-grade bond market to refinance short-term borrowing and help pay for its acquisition of Onnec Group Ltd.
The commercial real estate services firm sold $500 million of 5.650% notes due 2032 at 99.424% of face value and $500 million of 5.900% notes due 2037 at 97.872% of face value, it said late Tuesday. The notes will be issued by subsidiary CBRE Services Inc. and fully guaranteed by the parent company.
Use of proceeds
CBRE estimates net proceeds of about $980.2 million after underwriting discounts and before other offering expenses. It plans to use the money for general corporate purposes, including repaying borrowings under its commercial paper program and funding the Onnec purchase, according to the pricing release and the company’s prospectus supplement.
CBRE agreed on Oct. 20 to buy London-based Onnec, which designs, installs and maintains network, fiber and data center infrastructure for hyperscale technology companies in the U.K., continental Europe and the Asia-Pacific region. The initial price is £460 million, or about $610 million, in cash, plus a multiyear earnout of up to £300 million if Onnec meets growth targets. CBRE expects the deal to close around year-end, subject to regulatory approvals.
Underwriters and settlement
Wells Fargo Securities, BofA Securities, HSBC Securities (USA) and J.P. Morgan Securities are joint book-running managers. Both series are expected to settle on Nov. 5, subject to customary closing conditions.
The deal was one of several investment-grade financings on Tuesday. Blackstone priced $1.1 billion of senior notes due 2031 and 2033 the same day, and business development company Main Street Capital priced $500 million of notes due 2030.
