By Andrea Heisinger
New York, Feb. 14 - Rock-Tenn Co. priced an upsized $750 million of senior notes (Ba1/BBB-/) in two parts on Tuesday, an informed source said.
The deal size was increased from $600 million, a source said.
The $350 million of 4.45% seven-year notes priced at 99.909 to yield 4.465% with a spread of Treasuries plus 312.5 basis points. The tranche priced significantly tighter than talk in the 387.5 bps area.
There is a make-whole call on the notes at 50 bps over Treasuries.
A second tranche of $400 million of 4.9% 10-year paper priced at 99.81 to yield 4.924% with a spread of 300 bps over Treasuries. The notes were priced tighter than guidance that was in the 375 bps area.
The 10-year notes have a make-whole redemption at 45 bps over Treasuries.
The deal was priced under Rule 144A and Regulation S.
The notes feature a change-of-control put at 101% if the company is acquired.
Active bookrunners were Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC. Stifel, Nicolaus & Co. Inc. and Jefferies & Co. were passive bookrunners.
Proceeds will be used to prepay all $746.3 million of loans outstanding under an existing term loan B facility and to pay related costs and expenses. Any remainder will be used to repay amounts outstanding under a revolving credit or receivables facility.
The notes are guaranteed by current and future domestic subsidiaries.
The paper and packaging manufacturer is based in Norcross, Ga.
| Issuer: | Rock-Tenn Co.
|
| Guarantor: | Domestic subsidiaries
|
| Issue: | Senior notes
|
| Amount: | $750 million, increased from $600 million
|
| Bookrunners: | Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Wells Fargo Securities LLC (active), Stifel, Nicolaus & Co. Inc., Jefferies & Co. (passive)
|
| Distribution: | Rule 144A and Regulation S
|
| Change-of-control put: | At 101% if company is acquired
|
| Trade date: | Feb. 14
|
| Settlement date: | Feb. 22
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BBB-
|
|
|
| Seven-year notes
|
| Amount: | $350 million
|
| Maturity: | March 1, 2019
|
| Coupon: | 4.45%
|
| Price: | 99.909
|
| Yield: | 4.465%
|
| Spread: | Treasuries plus 312.5 bps
|
| Call: | Make-whole at Treasuries plus 50 bps
|
| Price talk: | 387.5 bps area
|
|
|
| 10-year notes
|
| Amount: | $400 million
|
| Maturity: | March 1, 2022
|
| Coupon: | 4.9%
|
| Price: | 99.81
|
| Yield: | 4.924%
|
| Spread: | Treasuries plus 300 bps
|
| Call: | Make-whole at Treasuries plus 45 bps
|
| Price talk: | 375 bps area
|
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