Alliance One returns with $450 million eight-year notes talked 10¾%-11%, to price Thursday

By Paul A. Harris

St. Louis, May 3 - Alliance One International Inc. returned to the high-yield primary market on Thursday with a $450 million offering of eight-year senior unsecured notes (B3/B), according to an informed source.

Price talk is 10¾% to 11%, with pricing expected Thursday morning.

Wachovia Securities and Deutsche Bank Securities are joint bookrunners for the Rule 144A offering.

The notes come with four years of call protection.

Dimon Inc, which will change its name to Alliance One International Inc. following its merger with Standard Commercial Corp., intends to use the proceeds, along with borrowings under a new $150 million senior secured term loan A, a new $200 million senior secured term loan B and initial drawings on a new $300 million senior secured revolver, to repay outstanding debt under Dimon's and Standard's existing senior credit facilities.

The company will also fund tender offers for Dimon's $200 million of 9 5/8% senior notes due 2011 and $125 million of 7¾% senior notes due 2013 and Standard's $150 million of 8% senior notes due 2012. Alliance One also intends to redeem, shortly after closing of the offering, all of its outstanding $73.3 million of 6¼% convertible subordinated debentures due 2007.

On April 19, the company postponed a $650 million three-tranche offering, also via Wachovia Securities and Deutsche Bank Securities, citing adverse conditions in the high-yield debt markets.

That offering was comprised of two tranches of senior notes (B2/B+) and one tranche of subordinated notes (B3/B).

In downsizing the amount of notes that it intends to sell to $450 million from $650 million the company shifted $200 million to its bank loan, the informed source said on Tuesday.

Dimon, a Danville, Va., company, is the world's second-largest dealer of leaf tobacco with operations in more than 30 countries.

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