By Paul A. Harris
St. Louis, July 14 - RBS Global, Inc. and Rexnord Corp. priced a downsized and restructured $785 million offering of notes on Friday, according to an informed source.
The Milwaukee-based motion technology products manufacturer priced an upsized $485 million issue of eight-year notes (B3/CCC+) at par to yield 9½%.
The yield came 12.5 basis points wide of the 9¼% area price talk. The senior note tranche was upsized from $420 million.
The company also priced a downsized $300 million issue of 10-year senior subordinated notes (Caa1/CCC+) at par to yield 11¾%.
The issue priced 50 basis points wide of the 11% to 11¼%, which had been revised from earlier talk in the 10¾% area. The subordinated note tranche was downsized from $365 million, after having been downsized earlier in the week from $420 million.
The overall transaction was downsized from $840 million, with $55 million shifted to the company's credit facility.
Credit Suisse, Merrill Lynch, Bear Stearns and Lehman Brothers were joint bookrunners for the notes, which were sold via Rule 144A with registration rights and via Regulation S.
Proceeds, together with an equity investment by an affiliate of Apollo Management, LP, will be used to finance Apollo's purchase of RBS Global from The Carlyle Group as previously announced on May 25.
| Issuer: | RBS Global, Inc. and Rexnord Corp.
|
| Amount: | $785 million (decreased from $840 million)
|
| Bookrunners: | Credit Suisse, Merrill Lynch, Bear Stearns, Lehman Brothers
|
| Trade date: | July 14
|
| Settlement date: | July 21
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
|
|
| Senior notes
|
| Amount: | $485 million (increased from $420 million)
|
| Maturity: | Aug. 1, 2014
|
| Coupon: | 9½%
|
| Price: | Par
|
| Yield: | 9½%
|
| Spread: | 445 bps
|
| Call protection: | 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
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Price talk: | 9¼% area
|
|
|
| Senior subordinated notes
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| Amount: | $300 million (decreased from $365 million)
|
| Maturity: | Aug. 1, 2016
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| Coupon: | 11¾%
|
| Price: | Par
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| Yield: | 11¾%
|
| Spread: | 669 bps
|
| Call protection: | Callable after Aug. 1, 2011 at 105.875, 103.917, 101.958, par on and after Aug. 1, 2014
|
| Equity clawback: | Until Aug. 1, 2009 for 35% at 111.75
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Price talk: | 11%-11¼% (revised from 10¾% area)
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