New Issue: AK Steel sells $350 million six-year secured notes at par to yield 8¾%

By Paul A. Harris

Portland, Ore., Nov. 14 - AK Steel Corp. priced a $350 million issue of six-year senior secured notes (B1/BB-/) at par to yield 8¾% on Wednesday, according to a syndicate source.

The yield printed 12.5 basis points beyond the wide end of price talk that was set in the 8½% area.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. and UBS Securities LLC were the joint bookrunners for the quick-to-market deal.

Proceeds will be used to repay the company's existing ABL facility and for general corporate purposes.

The integrated producer of flat-rolled carbon, specialty stainless and electrical steels and tubular products is based in West Chester, Ohio.

Issuer:	AK Steel Corp.
Amount:	$350 million
Maturity:	Dec. 1, 2018
Securities:	Senior secured notes
Bookrunners:	Bank of America Merrill Lynch, Deutsche Bank Securities Inc., Wells Fargo Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co., UBS Securities LLC
Co-managers:	Fifth Third Securities Inc., SG CIB
Coupon:	8¾%
Price:	Par
Yield:	8¾%
Spread:	792 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Dec. 1, 2015, then callable at 104.375, 102.188, par on and after Dec. 1, 2017
Equity clawback:	35% at 108.75 until Dec. 1, 2015
Change-of-control put:	101%
Trade date:	Nov. 14
Settlement date:	Nov. 20
Ratings:	Moody's: B1
	Standard & Poor's: BB-
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	8½% area
Marketing:	Quick to market

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