Lexmark International Hires UBS to Lead Debt Refinancing Effort

By Alexander Gladstone 

Lexmark International Inc. has hired UBS Group AG to lead an effort to refinance its $1.8 billion debt stack, according to people familiar with the matter.

The Lexington, Ky-based printing technology company, which is owned by Chinese investors, needs to address the near-term maturity of its $340 million senior notes due March 15, 2020, as well as other looming debt obligations. UBS has in recent weeks reached out to prospective investors in order to gauge support for a global refi, the people said.

Lexmark was formed in 1991 when private-equity firm Clayton, Dubilier & Rice purchased IBM's printer and keyboard operations. In 2016 a consortium of three Chinese companies -- printing equipment maker Apex Technology Co. Ltd. and investment firms PAG Asia Capital, and Legend Capital -- acquired it for about $2.5 billion. Apex in 2017 changed its name to Ninestar Corporation.

The Chinese buyers financed the acquisition with about $1.4 billion of loans underwritten by China Citic Bank Corp. and other Chinese banks including Bank of China Ltd. The existing $340 million notes, which were originally issued in 2013, were left in place following the acquisition.

In 2018, the company said it was planning to securitize the Chinese acquisition loans, which had previously been unsecured. The disclosure triggered a selloff of the bonds, sending them down by more than 40 points to trade at less than 60 cents on the dollar. However, trading levels strengthened after Lexmark put out a statement indicating that the notes would also be granted a security interest.

The notes last traded at 98 cents on the dollar on Sept. 18 for an 11% yield, according to data from MarketAxess.

UBS declined to comment. Lexmark didn't immediately respond to a request for comment.

Write to Alexander Gladstone at [e-mail]

(END) Dow Jones Newswires

September 23, 2019 11:26 ET (15:26 GMT)

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