Allis-Chalmers Energy talks $225 million 10-year notes at 8 5/8% area, to price Wednesday

By Paul A. Harris

St. Louis, Jan. 23 - Allis-Chalmers Energy Inc. talked its $225 million offering of 10-year senior notes (B3/B) at the 8 5/8% area on Tuesday, according to an informed source.

The books will close at 1 p.m. ET on Wednesday, and the notes are expected to price on Wednesday afternoon.

RBC Capital Markets is the bookrunner for the notes, which will be marketed via Rule 144A with registration rights and via Regulation S. Morgan Joseph is the co-manager.

The notes will come with five years of call protection.

Proceeds will be used to repay a portion of the debt outstanding under its $300 million bridge loan facility, which was incurred to finance Allis-Chalmers' recent acquisition of substantially all the assets of Oil & Gas Rental Services, Inc.

The Houston-based company is making a concurrent equity offering of 4.5 million shares.

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