By Paul A. Harris
St. Louis, April 7 - Qwest Corp., a subsidiary of Qwest Communications International Inc., priced a massively upsized $810.5 million split-rated issue of 8 3/8% seven-year senior notes (Ba1/BBB-/BBB-) at 92.498 to yield 9 7/8% on Tuesday, according to informed sources.
The yield came in the middle of the 9¾% to 10% price talk.
The issue, which was introduced at an amount of $300 million, was slightly less than two-times oversubscribed at the upsized amount, according to an informed source.
About 85% of the participation came from high-yield accounts, including crossover accounts, with the remainder of the participation coming from high-grade investors.
"The company was definitely rate-sensitive," the source commented.
"Once the deal came together at these levels they were keen to upsize it."
J.P. Morgan Securities Inc., Banc of America Securities LLC, Morgan Stanley & Co. Inc. and Wachovia Securities LLC were joint bookrunners for the Rule 144A/Regulation S with registration rights deal.
"We're pleased with the strong demand and success of this offer," said Joseph J. Euteneuer, Qwest executive vice president and chief financial officer, in a late Tuesday press release.
The sale generated $749.696 million of proceeds, which will be used for general corporate purposes, including repayment of Qwest Corp.'s debt, and funding and refinancing investments in the company's telecommunications assets.
The issuer is a Denver-based telecommunications company.
| Issuer: | Qwest Corp.
|
| Face amount: | $810.5 million, upsized from $300 million
|
| Proceeds: | $749.696 million (approximate)
|
| Maturity: | May 1, 2016
|
| Security description: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities Inc., Banc of America Securities LLC, Morgan Stanley & Co. Inc., Wachovia Securities LLC
|
| Coupon: | 8 3/8%
|
| Price: | 92.498
|
| Yield: | 9 7/8%
|
| Spread: | 746 bps
|
| Call protection: | Non-callable
|
| Trade date: | April 7
|
| Settlement date: | April 13
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BBB-
|
| Fitch: BBB-
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Price talk: | 9¾% to 10%
|
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