By Paul A. Harris
Portland, Ore., May 7 - Essar Steel Minnesota LLC priced its restructured $450 million issue of 11½% six-year senior secured notes (Caa1/CCC+/) at 97.901 to yield 12% on Wednesday, a syndicate source said.
The coupon and yield came on top of talk. The discount came in line with original issue discount talk of approximately 2 points.
The maturity was changed to six years from seven years.
Call protection was extended to the life of the bond from the previous structure in which the deal was non-callable for four years.
There were also covenant changes.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Jefferies & Co. were joint bookrunners.
The iron ore producer in northern Minnesota, part of India-based Essar Group, plans to use the proceeds to complete construction on its facility and begin commercial operations.
| Issuer: | Essar Steel Minnesota LLC
|
| Amount: | $450 million
|
| Maturity: | May 15, 2020 (maturity reduced from seven years)
|
| Securities: | Senior secured notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, Jefferies LLC
|
| Co-manager: | BMO Capital Markets Corp.
|
| Coupon: | 11½%
|
| Price: | 97.901
|
| Yield: | 12%
|
| Spread: | 1,007 bps
|
| Call protection: | Non-callable (reduced from non-call four years)
|
| Trade date: | May 7
|
| Settlement date: | May 14
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 11½% coupon at about 2 points OID to yield 12%
|
| Marketing: | Roadshow
|
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