Published on 12/13/2006 in the Prospect News High Yield Daily.
New Issue: Aleris prices $1 billion eight-, 10-year notes
By Paul A. Harris
St. Louis, Dec. 13 - Aleris International, Inc. priced a downsized $1 billion offering of high-yield notes in two tranches on Wednesday, according to a market source.
The Beachwood, Ohio, manufacturer of aluminum rolled products priced a $600 million tranche of eight-year senior PIK toggle notes (B3/B-) at par to yield 9%, on top of price talk. The coupon will increase by 75 basis points if and when the issuer elects to make a PIK payment.
Aleris also priced a $400 million tranche of 10-year senior subordinated notes (Caa1/B-) at par to yield 10%, also on top of the price talk.
Deutsche Bank Securities and Goldman Sachs & Co. were joint bookrunners.
Proceeds will be used to fund Texas Pacific Group's acquisition of Aleris and refinance $1.543 billion of existing debt.
The overall notes transaction was decreased from $1.10 billion.
| Issuer: | Aleris International, Inc.
|
| Total amount: | $1 billion (decreased from $1.10 billion)
|
| Bookrunners: | Deutsche Bank Securities, Goldman Sachs & Co.
|
| Trade date: | Dec. 13
|
| Settlement date: | Dec. 19
|
|
|
| Eight-year notes
|
| Amount: | $600 million
|
| Maturity | : | Dec. 15, 2014
|
| Security description: | Senior PIK toggle notes
|
| Coupon: | 9%
|
| PIK premium: | 75 bps
|
| Price: | Par
|
| Yield: | 9%
|
| Spread: | 453 bps
|
| Call features: | Callable on Dec. 15, 2010 at 104.50, 102.25, par on and after Dec. 15, 2012
|
| Equity clawback: | Until Dec. 15, 2009 for 35% at 109.0
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Price talk: | 9% area
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | Dec. 15, 2016
|
| Security description: | Senior subordinated notes
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| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Spread: | 551 bps
|
| Call features: | Callable on Dec. 15, 2011 at 105.0, 103.333, 101.667, par on and after Dec. 15, 2014
|
| Equity clawback: | Until Dec. 15, 2009 for 35% at 110.0
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Price talk: | 10% area
|
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