Published on 7/30/2012 in the Prospect News High Yield Daily.
New Issue: HD Supply sells $300 million tap of 8 1/8% notes due 2019 at 107.5 to yield 6.525%
By Paul A. Harris
Portland, Ore., July 30 - HD Supply, Inc. priced an upsized $300 million fungible add-on to its 8 1/8% senior secured first-priority notes due April 15, 2019 (confirmed B2/existing B+) at 107.5 on Monday, according to a syndicate source.
The reoffer price, which priced at the rich end of price talk that was set in the 107.375 area, rendered a 6.525% yield to worst.
Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays Capital Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC and UBS Securities LLC were the joint bookrunners for the quick-to-market add-on, which was upsized from $200 million.
Proceeds will be used for general corporate purposes and, pending such allocation, the entire net proceeds will be applied to reduce outstanding borrowings under the company's revolving ABL facility.
The original $950 million tranche priced at par on April 5, 2012 as part of an overall $1,625,000,000 transaction, which also included a $675 million tranche of 11% notes due April 15, 2020.
HD Supply is an Atlanta-based wholesale distributor for the infrastructure & energy, maintenance, repair & improvement and specialty construction sectors.
| Issuer: | HD Supply, Inc.
|
| Face amount: | $300 million, increased from $200 million
|
| Maturity: | April 15, 2019
|
| Security description: | Add-on to 8 1/8% senior secured first-priority notes due April 15, 2019
|
| Bookrunners: | Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays Capital Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC, UBS Securities LLC
|
| Coupon: | 8 1/8%
|
| Price: | 107.5
|
| Yield to worst: | 6.525%
|
| Spread: | 558 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until April 15, 2015, then callable at 106.094, 104.063, 102.031, par on and after April 15, 2018
|
| Equity clawback: | 35% at 108.125 until April 15, 2015
|
| Change-of-control put: | 101%
|
| Trade date: | July 30
|
| Settlement date: | Aug. 2
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: Existing B+
|
| Distribution: | Rule 144A with registration rights
|
| Fungibility: | Immediately fungible with existing notes
|
| Price talk: | 107.375 area
|
| Marketing: | Quick to market
|
| Original issue: | $950 million priced at par on April 5, 2012
|
| Total issue size: | $1.25 billion
|
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