Nielsen tender holdout misses deadline, gets black eye

Bill Weisbrod
+David Bell

8 December 2022•2 min read

Oops! At least one holder of Nielsen’s pre-buyout 4.75% unsecured bonds due 2031 not only missed the window to tender those holdings at a premium to par — to make matters worse, they then sold out of the stub notes they were left with at around 50 cents on the dollar.

As reporters we’re no strangers to missing deadlines, but we’ve never missed one as expensive as this.

Here are the recent TRACE records for the bonds in question, which Nielsen tendered for (at a price of 101.25) as part of its transition to private equity ownership a few weeks ago:

“This was a costly mistake for whoever didn’t participate in the tender,” said one trader of the hugely discounted trade. Nielsen declined to comment, while its sponsors Elliott and Brookfield and arranger BofA did not respond to requests for comment.

After this latest print, the bonds now offer a yield to maturity of more than 15%. That’s a roughly 500bps premium to Nielsen’s new 9.29% SSNs due 2029, which currently trade with a 10.085% yield; those bonds were issued last month to fund the company’s LBO.

Yeah, they’re secured now…

That premium seems punchy if all it reflects is the illiquidity of a $14m stub note compared to the $1.96bn new issue. There’s an argument that the stub should have traded a lot tighter — because the reconfiguration of Nielsen’s capital structure after the LBO has improved their security.

Thanks to negative pledge provisions in Nielsen’s legacy unsecured bonds, the new buyout financing made them secured — pari passu with Nielsen’s new secured notes — according to the new deal prospectus.

That means whoever bought the stub is picking up 500bps of premium, for debt that has the same security: