By Paul Deckelman
New York, May 2 - Consolidated Minerals Ltd. priced $400 million of six-year senior secured notes (B3/B+/) on Friday, high-yield market sources said.
The notes - carrying an 8% coupon - priced at 97.684 to yield 8½%.
That was well wide of original pre-deal market price talk envisioning an 8¼% yield with an original issue discount of about 1% - but was in line with revised talk, issued later in the session before the actual pricing, calling for an 8½% yield and an OID of 2.25 points.
Deutsche Bank AG, London Branch, was the bookrunner on the deal, which was announced on April 23 and marketed to investors via a roadshow that began April 24 in London and then moved on to the United States earlier this week.
The notes were sold under Rule 144A and Regulation S, with no registration rights.
The securities come with three years of call protection, plus standard equity clawback and change-of-control put provisions.
Consolidated Minerals - a supplier of manganese ore and other steel-making commodities based in St. Helier on the British crown dependency of Jersey in the Channel Islands and with mining operations in Australia and Ghana - estimates that the bond sale will yield gross proceeds of almost $391 million and net proceeds of some $383 million.
The company plans to use $250 million of the proceeds to repay loans from a related-party entity that is wholly owned by Consmin's ultimate controlling shareholder, and will use $118 million of the proceeds to partially repay its outstanding 8 7/8% senior secured notes due 2016. The company sold $405 million of the latter notes in April of 2011 and as of Dec. 31, 2013 had $235 million still outstanding. It will concurrently repay the remainder of the 2016 notes from cash on hand.
Remaining bond-sale proceeds will be carried as cash on the balance sheet and used for general corporate purposes.
| Issuer: | Consolidated Minerals Ltd.
|
| Face amount: | $400 million
|
| Gross proceeds: | $390,736,000
|
| Expected net proceeds: | About $383 million
|
| Maturity: | May 15, 2020
|
| Securities: | Senior secured notes
|
| Bookrunner: | Deutsche Bank AG, London Branch
|
| Coupon: | 8%
|
| Price: | 97.684
|
| Yield to maturity: | 8½%
|
| Spread: | 658 bps over 3.5% Treasuries due May 15, 2020
|
| Call protection: | Non-callable until May 15, 2017, then callable at 104, 102 and finally at par on or after May 15, 2019
|
| Make-whole call: | Treasuries plus 50 bps until May 15, 2017
|
| Equity clawback: | For up to 35% of issue at 108 until May 15, 2017
|
| Change-of-control put: | 101%
|
| Trade date: | May 2
|
| Settlement date: | May 6
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A and Regulation S without registration rights
|
| Marketing: | Roadshow
|
| Price talk: | Initial price talk 8¼% with OID of about 1 point; revised price talk 8½% with OID of 2.25 points
|
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