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.
|
| Amount: | $460 million
|
| Bookrunners: | Credit Suisse, Banc of America Securities LLC, UBS Investment Bank
|
| Co-managers: | Goldman Sachs & Co., Lehman Brothers
|
| Trade date: | Jan. 31
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A/Regulation S
|
|
|
| Add-on
|
| Amount: | $310 million
|
| Proceeds: | $319.30 million
|
| Maturity: | Aug. 1, 2014
|
| Security description: | Add-on to 9½% senior notes due Aug. 1, 2014
|
| Coupon: | 9½%
|
| Price: | 103.0
|
| Yield to worst: | 8.799%
|
| Spread to worst: | 399 bps
|
| Call features: | Callable after Aug. 1, 2010 at 104.75, 102.375, par on and after Aug. 1, 2012
|
| Equity clawback: | Until Aug. 1, 2009 for 35% at 109.50
|
| Settlement date: | Feb. 7, with accrued interest
|
| Price talk: | 102.50 area
|
|
|
| New notes
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| Amount: | $150 million
|
| Maturity: | Sept. 1, 2016
|
| Security description: | Senior notes
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| Coupon: | 8 7/8%
|
| Price: | Par
|
| Yield: | 8 7/8%
|
| Spread: | 405 bps
|
| First call date: | Aug. 1, 2011
|
| Settlement date: | Feb. 7
|
| Price talk: | 9% area
|
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