Published on 1/31/2007 in the Prospect News High Yield Daily.
New Issue: Rexnord prices $460 million in two tranches
By Paul A. Harris
St. Louis, Jan. 31 - RBS Global Inc. and Rexnord Corp. completed a $460 million two-part sale of notes (B3/CCC+) on Wednesday, according to informed sources.
The Milwaukee-based power train manufacturer priced a $310 million add-on to its 9½% senior notes due Aug. 1, 2014 at 103.0, resulting in a yield to worst of 8.799%. The add-on, which generated $319.30 million of proceeds, priced inside of the 102.50 area price talk.
In addition, Rexnord priced $150 million of new senior notes due Sept. 1, 2016 at par to yield 8 7/8%, at the tight end of the 9% area price talk.
Credit Suisse, Banc of America Securities LLC and UBS Investment Bank were the bookrunners for the Rule 144A and Regulation S transaction. Goldman Sachs & Co. and Lehman Brothers were the co-managers.
Proceeds will be used to help fund the purchase of Jacuzzi Brands Inc.'s Zurn plumbing products business.
Issuers: | RBS Global Inc. and Rexnord Corp.
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Amount: | $460 million
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Bookrunners: | Credit Suisse, Banc of America Securities LLC, UBS Investment Bank
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Co-managers: | Goldman Sachs & Co., Lehman Brothers
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Trade date: | Jan. 31
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Ratings: | Moody's: B3
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| Standard & Poor's: CCC+
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Distribution: | Rule 144A/Regulation S
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Add-on
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Amount: | $310 million
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Proceeds: | $319.30 million
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Maturity: | Aug. 1, 2014
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Security description: | Add-on to 9½% senior notes due Aug. 1, 2014
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Coupon: | 9½%
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Price: | 103.0
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Yield to worst: | 8.799%
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Spread to worst: | 399 bps
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Call features: | Callable after Aug. 1, 2010 at 104.75, 102.375, par on and after Aug. 1, 2012
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Equity clawback: | Until Aug. 1, 2009 for 35% at 109.50
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Settlement date: | Feb. 7, with accrued interest
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Price talk: | 102.50 area
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New notes
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Amount: | $150 million
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Maturity: | Sept. 1, 2016
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Security description: | Senior notes
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Coupon: | 8 7/8%
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Price: | Par
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Yield: | 8 7/8%
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Spread: | 405 bps
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First call date: | Aug. 1, 2011
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Settlement date: | Feb. 7
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Price talk: | 9% area
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