New Issue: RailAmerica sells upsized $740 million 9¼% eight-year notes at 95.923 to yield 10%

By Paul A. Harris

St. Louis, June 17 - RailAmerica Inc. priced an upsized $740 million issue of 9¼% eight-year senior secured notes (B1/BB-/) at 95.923 to yield 10% on Wednesday, according to an informed source.

The yield was printed on top of yield talk. The issue price came within the context of price talk specifying approximately 4 points of original issue discount.

Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc. and Wachovia Securities LLC were joint bookrunners for the deal, which was upsized from $700 million.

Proceeds will be used to repay term loan debt, to repay a swap and for general corporate purposes.

The issuer is a Jacksonville, Fla.-based short-line and regional rail service provider.

Issuer:	RailAmerica Inc.
Face amount:	$740 million, increased from $700 million
Proceeds:	$709.83 million (approximate)
Maturity:	July 1, 2017
Security description:	Senior secured notes
Bookrunners:	Citigroup Global Markets Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co. Inc., Wachovia Securities LLC
Coupon:	9¼%
Price:	95.923
Yield:	10%
Spread:	651 bps
Call features:	Make-whole call at Treasuries plus 50 bps until July 1, 2013, then callable at 104.625, 102.313, par on and after July 1, 2015
Equity clawback:	35% at 109.25 until July 1, 2012
Trade date:	June 17
Settlement date:	June 23
Ratings:	Moody's: B1
	Standard & Poor's: BB-
Distribution:	Rule 144A
Price talk:	10% yield with about 4 points of OID

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