By Paul Deckelman
New York, Aug. 6 - Affinia Group Inc. priced its $225 million issue of senior secured notes due 2016 (B1/B+) on Thursday to yield 11%, high yield syndicate sources said.
The 10¾% notes due Aug. 15, 2016 priced at 98.799. The 11% yield came at the tight end of price talk envisioning a range of between 11% and 11¼%, while the price came somewhat rich to market expectations of an original issue discount of approximately 2 points.
The notes were sold under Rule 144A and will carry that designation for the life of the issue, and under Regulation S.
They will carry call protection for the first three years after issue.
The new paper will be secured by a first lien on everything except for Affinia's current assets, which will be security on a second-lien basis. Those current assets will meantime secure on a first-lien basis a $315 million asset-backed revolving credit facility which the company is expected to launch on Monday. That revolver will also be secured by a second lien against all of the company's other assets.
The deal - which was first announced on Monday morning and then shopped around to investors via a short roadshow after that - was brought to market via joint bookrunners J.P. Morgan Chase & Co., Bank of America Merrill Lynch, Barclays Capital, Inc. and Deutsche Bank Securities, Inc., with JPMorgan on the left.
Affinia Group - an Ann Arbor, Mich.-based manufacturer and distributor of automotive aftermarket components for passenger cars, SUVs, light and heavy trucks and off-highway vehicles, such as brakes, filtration and chassis products - plans to use the deal proceeds, together with funds from unspecified other sources (i.e. the planned new revolver) to repay its existing term loan, its existing revolving credit facility, and its accounts receivable securitization facility.
| Issuer: | Affinia Group Inc.
|
| Amount: | $225 million
|
| Proceeds: | $222,297,750
|
| Maturity: | Aug. 15, 2016
|
| Security description: | Senior secured notes
|
| Bookrunners: | J.P. Morgan Chase & Co., Bank of America Merrill Lynch, Barclays Capital, Inc. and Deutsche Bank Securities, Inc.
|
| Coupon: | 10¾%
|
| Price: | 98.799
|
| Yield: | 11%
|
| Spread: | 765 basis points
|
| Call features: | Make-whole provision at Treasuries plus 50 bps until Aug. 15, 2012, then callable at 108.063; callable on or after Aug. 15, 2013 at 105.375; callable one or after Aug. 15, 2014 at 102.688; and finally callable at par on or after Aug. 15, 2015.
|
| Special redemption: | Special annual call at 103% of principal plus accrued interest for up to $22.5 million principal amount of notes in any 12-month period.
|
| Equity clawback: | For up to 35% of issue at 110.75 until Aug. 15, 2012
|
| Trade date: | Aug. 6
|
| Settlement date: | Aug. 13
|
| Ratings: | Moody's: B1
|
| S&P: B+
|
| Distribution: | Rule 144A/Regulation S
|
| Price talk: | 11% to 11¼% with approximately 2 points of OID
|
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