By Paul A. Harris
St. Louis, Jan. 11 - American Real Estate Partners, LP, in conjunction with American Real Estate Finance Corp., priced a massively upsized $500 million add-on to its 7 1/8% senior notes due Feb. 15, 2013 (Ba3/BB+) at 99.50 to yield 7.226% on Thursday, according to an informed source.
The issue price came in the middle of the 99.25 to 99.75 price talk.
Jefferies & Co. was the bookrunner for the notes issue, which was priced via Rule 144A with registration rights and via Regulation S.
Proceeds will be used for general business purposes, including possibly for acquisitions of businesses or assets.
The add-on was upsized from $300 million and generated $497.5 million of proceeds.
The issuer is a Mount Kisco, N.Y.-based company that invests in rental real estate, hotels and resorts, housing and condominium development.
The original $480 million issue priced at par on Feb. 1, 2005.
| Issuer: | American Real Estate Partners, LP
|
| Co-issuer: | American Real Estate Finance Corp.
|
| Face amount: | $500 million (upsized from $300 million)
|
| Gross proceeds: | $497.5 million
|
| Maturity: | Feb. 15, 2013
|
| Security description: | Add-on to the 7 1/8% senior notes
|
| Bookrunner: | Jefferies & Co.
|
| Coupon: | 7 1/8%
|
| Price: | 99.50
|
| Yield to maturity: | 7.226%
|
| Spread: | 252 bps
|
| Call features: | Callable on Feb. 15, 2009 at 103.563, 101.781, par on or after Feb. 15, 2011
|
| Equity clawback: | Until Feb. 15, 2008 for 35% at 107.125
|
| Trade date: | Jan. 11
|
| Settlement date: | Jan. 17, with accrued interest
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Price talk: | 99.25 to 99.75
|
| Original issue: | $480 million issue priced at par on Feb. 1, 2005
|
| Total issue size: | $980 million
|
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