Enerflex talks $625 million 9% five-year secured notes to yield 11¾%-12%; pricing Thursday

By Paul A. Harris

Portland, Ore., Oct. 6 – Enerflex Ltd. talked its $625 million offering of senior secured first-lien, second-out notes due October 2027 (B2/BB-/BB-) with a 9% coupon to yield 11¾% to 12%, according to market sources.

Books close late Thursday morning, and the deal is set to price thereafter.

Orders for the new Enerflex notes ran to three-times deal size, with over 100 accounts in the book early Thursday morning, according to a sellside source.

Reverse inquiry, which ran to at least half the size of the deal, could be an inhibiting factor when the bond allocations are made, the source added.

Left bookrunner RBC will bill and deliver. Scotia and TD Securities are joint active bookrunners. ATB Capital Markets, BMO Capital Markets, CIBC Capital Markets and National Bank of Canada Financial Markets are the co-managers.

The Rule 144A and Regulation S for life five-year notes become callable after two years at par plus 75% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

Proceeds will be used to refinance debt and fund a portion of the acquisition of Exterran Corp. into escrow.

Enerflex is a Calgary, Alta.-based publicly traded supplier of services to the power generation and gas production industries.

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