By Paul A. Harris
Portland, Ore., Aug. 3 – Cornerstone Chemical Co. priced an upsized $450 million issue of seven-year senior secured notes (B2/B) at par to yield 6¾% on Thursday, according to market sources.
The issue size was increased from $430 million.
The yield printed on top of final yield talk, and at the tight end of previous official talk of 6¾% to 7%. Talk firmed through the course of time that the deal has been in the market. Initial guidance was in the low-to-mid 7% area. That subsequently firmed to the 7% area early in the July 31 week.
Goldman Sachs & Co. is the left bookrunner. Credit Suisse Securities (USA) LLC and KeyBanc Capital Markets LLC are the joint bookrunners.
Proceeds will be used to fund the acquisition of Cornerstone Chemical Co. by Littlejohn & Co. LLC from H.I.G. Capital and to repay debt. The additional $20 million of proceeds resulting from the upsizing of the deal will be used to reduce the amount of equity in the acquisition financing.
The issuing entity will be CSTN Merger Sub, Inc., which will become Cornerstone Chemical when the acquisition closes.
Cornerstone Chemical is a Waggaman, La.-based chemical producer.
| Issuer: | CSTN Merger Sub, Inc. until the merger closes, then Cornerstone Chemical Co.
|
| Amount: | $450 million, increased from $430 million
|
| Maturity: | Aug. 15, 2024
|
| Securities: | Senior secured notes
|
| Left bookrunner: | Goldman Sachs & Co.
|
| Joint bookrunners: | Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets
|
| Coupon: | 6¾%
|
| Price: | Par
|
| Yield: | 6¾%
|
| Spread: | 469 bps
|
| First call: | Aug. 15, 2020 at 103.375
|
| Trade date: | Aug. 3
|
| Settlement date: | Aug. 9
|
| Ratings: | Moody's: B2
|
| S&P: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 6¾%, revised from 6¾% to 7%
|
| Marketing: | Roadshow
|
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