By Paul Deckelman
New York, Oct. 31 – Consol Mining Corp. priced $300 million of senior secured second-lien notes (B3/CCC+) due 2025 at par to yield 11%, high-yield syndicate sources said on Tuesday.
Price talk on the issue had been 10¾% to 11% – wider than the 9% area price talk which had circulated in the market toward the end of last week.
The issue was twice downsized, first from the originally planned $350 million to $325 million earlier Monday, and then again later in the session to $300 million.
The deal was first announced on Oct. 23 and had been expected to price at the tail end of last week, but that did not happen and the issue was ultimately floated off to this week.
That Rule 144A and Regulation S for life transaction was brought to market via left-side bookrunner J.P. Morgan Securities LLC., along with BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Huntington Investment Co., PNC Capital Markets LLC and Stifel, Nicolaus & Co. Inc.
The notes will come with four years of call protection, as well as a three-year equity clawback for up to 35% of the issue and a 101% change-of-control put.
The company – a Pittsburgh-based coal mine operator being spun off from its corporate parent, Consol Energy Inc., an oil and natural gas exploration and production company also based in Pittsburgh – plans to use the new-deal proceeds, together with borrowings under new term loan facilities and a revolving credit facility to be entered into upon its separation from Consol Energy, to fund that spinoff via a payment to Consol Energy under the terms of the coming separation.
A portion of the proceeds will also be used to refinance the existing revolver debt of CNX Coal Resources LP, to fund working capital needs and for general corporate purposes.
| Issuer: | Consol Mining Corp.
|
| Amount: | $300 million, downsized from original $350 million to $325 million, then again to $300 million
|
| Security: | Senior secured second-lien notes
|
| Maturity: | Nov. 15, 2025
|
| Bookrunners: | J.P. Morgan Securities LLC., BofA Merrill Lynch, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Huntington Investment Co., PNC Capital Markets LLC and Stifel, Nicolaus & Co. Inc.
|
| Coupon: | 11%
|
| Price: | Par
|
| Yield: | 11%
|
| Spread: | 870 bps over Treasuries
|
| Call structure: | Non-callable for four years (first call at par plus 50% coupon)
|
| Equity clawback: | For up to 35% of the issue at 111% until Nov. 15, 2020
|
| Change-of-control put: | 101%
|
| Trade date: | Oct. 30
|
| Settlement date: | Nov. 13 (T+10)
|
| Ratings: | Moody’s: B3
|
| S&P: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 10¾% to 11%, versus 9% area guidance heard last week
|
| Marketing: | Roadshow
|
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