Published on 6/26/2003 in the Prospect News High Yield Daily.
New Issue: Reliant Resources upsizes to $1.1 billion in seven and 10-year tranches
By Paul A. Harris
St. Louis, June 26 - Reliant Resources, Inc. sold an upsized $1.1 billion notes offering in two senior secured notes tranches (B1/B) on Thursday, according to a syndicate source. The deal had launched at $350 million in a single tranche of seven-year senior secured notes, before upsizing to $1 billion, then upsizing again to Thursday's $1.1 billion transaction.
The company sold $550 million due July 1, 2010 at par to yield 9 ¼% (price talk was 9 ¼%-9 ½%), and $550 million due July 1, 2013, also at par to yield 9 ½% (price talk was 25 basis points behind the seven-year notes).
Banc of America Securities, Goldman Sachs, Deutsche Bank Securities and Barclays Capital were joint bookrunners on the Rule 144A deal. The co-managers were ABN Amro, Commerzbank, ING Barings, BNP Paribas, Scotia Capital and TD Securities.
Proceeds will be used to repay debt under the existing credit facility.
The issuer is a Houston-based provider of electricity and energy services.
| Issuer: | Reliant Resources, Inc.
|
| Amount: | $1.1 billion (originally one $350 million tranche, finally upsized from $1 billion)
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| Security description: | Senior secured notes
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| Bookrunner: | Banc of America Securities, Goldman Sachs, Deutsche Bank Securities, Barclays Capital (joint)
|
| Settlement date: | July 1, 2003
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| Ratings: | Moody's: B1
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| Standard & Poor's: B
|
|
|
| Seven-year Tranche
|
| Amount: | $550 million
|
| Maturity: | July 15, 2010
|
| Coupon: | 9 ¼%
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| Price: | Par
|
| Yield: | 9 ¼%
|
| Spread: | 630 basis points
|
| Call features: | Callable on July 15, 2007 at 104.625, 102.313, par on July 15, 2009 and thereafter
|
| Equity clawback: | Until July 15, 2006 for 35% at 109.25
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| Rule 144A Cusip: | 75952BAE5
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| Price talk: | 9 ¼%-9 ½%
|
|
|
| 10-year Tranche
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| Amount: | $550 million
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| Maturity: | July 15, 2013
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| Coupon: | 9 ½%
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| Price: | Par
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| Yield: | 9 ½%
|
| Spread: | 601 basis points
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| Call features: | Callable on July 15, 2008 at 104.75, 103.167, 101.583, par on July 15, 2011 and thereafter
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| Equity clawback: | Until July 15, 2006 for 35% at 109.50
|
| Rule 144A Cusip: | 75952BAH8
|
| Price talk: | 25 basis points behind the seven-year notes
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