By Paul A. Harris
Portland, Ore., June 8 – Aleris International, Inc. priced a $400 million issue of five-year senior secured junior priority notes (Caa2/CCC+) at par to yield 10¾% on Friday, according to a market source.
The yield printed at the tight end of the 10¾% to 11% yield talk and inside of initial talk in the 11¼% area.
There were also covenant changes.
Aleris was heard to be two-times oversubscribed at 11¼%, according to an investor, who specified that people liked that coupon and that the deal was seeing a significant roll from investors being taken out of the company's 7 7/8% senior notes due 2020 and 9½% senior secured notes due 2021, which are being redeemed in the transaction.
Deutsche Bank Securities Inc. is the left lead for the Rule 144A and Regulation S deal. Barclays, BofA Merrill Lynch and J.P. Morgan Securities LLC are also bookrunners.
The notes come with two years of call protection.
Proceeds, along with funds from a planned new senior secured first-lien term loan and cash on hand, will be used to redeem all of the company’s outstanding 7 7/8% senior notes due 2020 and 9½% senior secured notes due 2021 and to repay part of the borrowings under the existing asset-based revolving credit facility.
Aleris is a Cleveland-based producer of aluminum rolled products.
| Issuer: | Aleris International, Inc.
|
| Amount: | $400 million
|
| Maturity: | July 15, 2023
|
| Securities: | Senior secured junior priority notes
|
| Left bookrunner: | Deutsche Bank Securities Inc.
|
| Joint bookrunners: | Barclays, BofA Merrill Lynch and J.P. Morgan Securities LLC
|
| Coupon: | 10¾%
|
| Price: | Par
|
| Yield: | 10¾%
|
| Spread: | 798 bps
|
| First call: | Make-whole call at Treasuries plus 50 bps until July 15, 2020, then callable at 104
|
| Equity clawback: | 40% at 110.75 until July 15, 2020
|
| Trade date: | June 8
|
| Settlement date: | June 25
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 10¾% to 11%
|
| Marketing: | Roadshow
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
