Published on 1/19/2011 in the Prospect News High Yield Daily.
New Issue: Inergy issues upsized $750 million 6 7/8% 10.5-year notes at par
By Paul A. Harris
Portland, Ore., Jan. 19 - Inergy, LP and Inergy Finance Corp. priced an upsized $750 million issue of 10.5-year senior notes (Ba3/B+/) at par to yield 6 7/8% on Wednesday, according to an informed source.
The yield printed at the tight end of the 6 7/8% to 7% price talk.
Bank of America Merrill Lynch, Barclays Capital Inc., Credit Suisse Securities, J.P. Morgan Securities LLC and Morgan Stanley & Co. Inc. were the joint bookrunners for the quick-to-market issue, which was upsized from $700 million.
Proceeds, along with proceeds from a new term loan, will be used to fund a partial redemption on Feb. 4 of $78.75 million of 8¾% senior notes due 2015 and to fund a tender offer for $425 million of 6 7/8% senior notes due 2014, $146.25 million of the notes due 2015 and $400 million of 8¼% senior notes due 2016.
Proceeds from the upsizing will be used to repay outstanding borrowings under the company's general partnership revolver and its working capital revolver as well as for additional working capital.
Inergy is a Kansas City, Mo.-based master limited partnership with operations that include the retail marketing, sale and distribution of propane.
| Issuers: | Inergy, LP and Inergy Finance Corp.
|
| Amount: | $750 million, increased from $700 million
|
| Maturity: | Aug. 1, 2021
|
| Securities: | Senior notes
|
| Bookrunners: | Bank of America Merrill Lynch, Barclays Capital Inc., Credit Suisse Securities, J.P. Morgan Securities LLC, Morgan Stanley & Co. Inc.
|
| Co-managers: | Wells Fargo Securities, Raymond James & Associates, SunTrust Robinson Humphrey Inc.
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Spread: | 354 bps
|
| Call protection: | Callable on and after Aug. 1, 2016 at 103.438, 102.292, 101.146, par on and after Aug. 1, 2019
|
| Equity clawback: | 35% at 106.875 until Aug. 1, 2014
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
| Price talk: | 6 7/8% to 7%
|
| Marketing: | Quick to market
|
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