By Paul A. Harris
St. Louis, March 29 - Host Marriott, LP priced an upsized $800 million issue of series P senior notes due June 1, 2016 (Ba2/BB-) at par to yield 6¾% in a quick-to-market transaction on Wednesday, according to informed sources.
The issue, which was upsized from $600 million, priced at the wide end of the 6 5/8% to 6¾% price talk.
Goldman Sachs & Co. and Banc of America Securities LLC were joint bookrunners for the issue, which was priced via Rule 144A with registration rights and via Regulation S. The co-managers were Deutsche Bank Securities, Merrill Lynch & Co., BNY Securities, Bank of Nova Scotia, Calyon Securities, Citigroup, The Royal Bank of Scotland, Societe Generale, Wachovia Securities and Bear Stearns & Co.
Proceeds will be used to fund a portion of the pending purchase of the Starwood Hotels & Resorts Worldwide, Inc. portfolio, or if the purchase is not completed, to redeem Host Marriott's 10% class C cumulative redeemable preferred stock, to repay or repurchase up to $200 million of Host Marriott, LP's existing 7 7/8% series B senior notes due 2008 and for general corporate purposes.
The issuer is a subsidiary of Bethesda, Md., lodging and hospitality company Host Marriott Corp.
| Issuer: | Host Marriott, LP
|
| Amount: | $800 million (upsized from $600 million)
|
| Maturity: | June 1, 2016
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| Security description: | Series P senior notes
|
| Bookrunners: | Goldman Sachs & Co., Banc of America Securities LLC
|
| Co-managers: | Deutsche Bank Securities, Merrill Lynch & Co., BNY Securities, Bank of Nova Scotia, Calyon Securities, Citigroup, The Royal Bank of Scotland, Societe Generale, Wachovia Securities and Bear Stearns & Co.
|
| Coupon: | 6¾%
|
| Price: | Par
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| Yield: | 6¾%
|
| Spread: | 195 basis points
|
| Call protection: | Five years
|
| Equity clawback: | 35% for three years
|
| Trade date: | March 29
|
| Settlement date: | April 4
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 6 5/8% to 6¾%
|
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