By Paul A. Harris
St. Louis, June 13 - Algoma Steel Inc., issuing via Algoma Acquisition Corp. priced a $450 million issue of eight-year senior unsecured notes (Caa1/B-) at par to yield 9 7/8% on Wednesday, according to an informed source.
The yield was printed in the middle of the 9¾% to 10% price talk.
UBS Investment Bank ran the books for the Rule 144A and Regulation S with registration rights deal.
The Sault Ste. Marie, Ont.-based steel producer will also put in place an $850 million credit facility.
Proceeds will be used to help fund Indiana-based Essar Steel Holdings Ltd.'s acquisition of the company for C$1.85 billion.
Issuer: | Algoma Acquisition Corp.
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Amount: | $450 million
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Maturity: | June 15, 2015
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Security description: | Senior unsecured notes
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Bookrunner: | UBS Investment Bank
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Coupon: | 9 7/8%
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Price: | Par
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Yield: | 9 7/8%
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Spread: | 466 bps
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Call features: | Make-whole at Treasuries plus 50 bps until June 15, 2011, then callable at 104.939, 102.469, par on and after June 15, 2013
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Trade date: | June 13
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Settlement date: | June 20
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Ratings: | Moody's: Caa1
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| Standard & Poor's: B-
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Distribution: | Rule 144A/Regulation S with registration rights
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Price talk: | 9¾% to 10%
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