HD Supply to price $1 billion eight-year notes in Monday drive-by

By Paul A. Harris

Portland, Ore., March 28 – HD Supply, Inc. plans to price a $1 billion offering of eight-year senior notes on Monday following a late-morning conference call with investors, according to market sources.

Early 6% whisper on the deal has given way to tighter guidance of 5¾% to 6%, as the market awaits official price talk, a trader said.

There is a significant reverse inquiry factor at play in the deal, sources say.

Barclays is the left lead bookrunner for the Rule 144A and Regulation S for life offering. J.P. Morgan Securities LLC, BofA Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners.

Deutsche Bank Securities Inc., Citigroup Global Markets Inc., UBS Investment Bank, Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey Inc., Baird, BB&T and Raymond James are the co-managers.

The notes become callable after three years at par plus 75% of coupon and feature a three-year 40% equity clawback and a 101% poison put.

The Atlanta-based industrial distributor plans to use the proceeds to redeem its 11½% senior notes due 2020.

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