HD Supply selling $650 million senior notes due 2021 Wednesday

By Paul A. Harris and Aleesia Forni

Columbus, Ohio, Jan. 9 - HD Supply Inc. intends to price a $650 million issue of senior subordinated notes due 2021 (existing ratings Caa3/CCC+), according to a market source.

Pricing is expected Wednesday afternoon following an investor call at 11 a.m. ET.

Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC and UBS Securities LLC are the joint bookrunners.

Baird, BB&T Capital Markets, Raymond James & Associates Inc. and SunTrust Robinson Humphrey Inc. are the co-managers.

The Rule 144A with registration rights and Regulation S notes will be non-callable for three years and carry a three-year 35% equity clawback.

The notes also carry a special equity clawback, stating that after July 31, 2013, either 100% of the notes or, if less than 100%, an amount up to 2/3 of the notes may be redeemed with IPO proceeds at 104 until Jan. 31, 2014 and at 102 after Jan. 31, 2014 until July 31, 2014.

There is also a 101% poison put.

Proceeds will be used to redeem a portion of the company's outstanding senior subordinated notes.

HD Supply is an Atlanta-based industrial distributor serving the infrastructure & energy, maintenance, repair & improvement and specialty construction sectors.

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