Published on 7/27/2009 in the Prospect News High Yield Daily.
New Issue: Pinnacle upsizes to $450 million, prices 8 5/8% eight-year notes at 98.597 to yield 8 7/8%
By Paul A. Harris
St. Louis, July 27 - Pinnacle Entertainment, Inc. priced an upsized $450 million issue of 8 5/8% eight-year senior notes (BB) at 98.597 to yield 8 7/8% on Monday, according to an informed source.
The yield was printed in the middle of the 8¾% to 9% price talk. The issue price came rich to the discount talk of approximately 2 points.
JP Morgan, Bank of America Merrill Lynch, Barclays Capital and Deutsche Bank Securities were joint bookrunners for the issue, which was upsized from $375 million.
The company intends to use a portion of the proceeds to purchase all of its existing 8¾% senior subordinated notes due 2013, of which $135 million are outstanding, and to repay approximately $206 million of its revolver.
The company expects to draw upon its revolver to fund development projects in the future. Remaining proceeds from the new notes will be used for general corporate purposes, including funding development projects.
The issuer is based in Las Vegas.
| Issuer: | Pinnacle Entertainment, Inc.
|
| Face amount: | $450 million (increased from $375 million)
|
| Proceeds: | $443.687 million
|
| Maturity: | Aug. 1, 2017
|
| Security description: | Senior notes
|
| Bookrunners: | JP Morgan, Banc of America Securities LLC/Merrill Lynch & Co., Barclays Capital, Deutsche Bank Securities
|
| Senior co-managers: | Goldman, Sachs & Co., UBS Investment Bank
|
| Co-managers: | Calyon Securities, Capital One Southcoast. Moelis & Co.
|
| Coupon: | 8 5/8%
|
| Price: | 98.597
|
| Yield: | 8 7/8%
|
| Spread: | 536 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Aug.1, 2013, then callable at 104.313, 102.156, par on and after Aug. 1, 2015
|
| Equity clawback: | 35% at 108.625 until Aug. 1, 2012
|
| Change of control: | Put at 101
|
| Trade date: | July 27
|
| Settlement date: | Aug. 10
|
| Ratings: | Standard & Poor's: BB
|
| Ratings: | Rule 144A/Regulation S with registration rights
|
| Price talk: | 8¾% to 9% with approximately 2 points of OID
|
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