By Paul A. Harris
St. Louis, Oct. 3 - Ryerson Inc. priced a $575 million two-part issue of senior secured notes (B2/B+) on Wednesday, according to an informed source.
The Chicago-based metals processing and distribution company priced a $425 million tranche of eight-year fixed-rate notes at par to yield 12%. The fixed-rate notes priced on top of the price talk.
Meanwhile Ryerson priced a $150 million tranche of seven-year floating-rate notes at three-month Libor plus 737.5 basis points. The floating-rate notes priced at the wide end of the Libor plus 725 bps price talk.
Banc of America Securities LLC was the manager for the Rule 144A with registration rights offering.
The notes are secured by a perfected first-priority interest in real property (including owned real estate interests and equipment), capital stock, interests in joint ventures, trademarks and other tangible and intangible assets, as well as by a pledge of 65% of the interest of foreign subsidiaries. The first-priority collateral was appraised on June 30, 2007 and was valued at between $696 million and $726 million.
In addition the notes will have second-priority interest in accounts receivables and inventory.
Proceeds will be used to partially finance the acquisition of the company by Platinum Equity, LLC.
The financing also includes a $1.35 billion asset-based revolving credit facility.
| Issuer: | Ryerson Inc.
|
| Total amount: | $575 million
|
| Bookrunner: | Banc of America Securities LLC
|
| Security description: | Senior secured notes
|
| Trade date: | Oct. 3
|
| Settlement date: | Oct. 19
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A with registration rights
|
|
|
| Fixed-rate notes
|
| Amount: | $425 million
|
| Maturity: | Nov. 1, 2015
|
| Coupon: | 12%
|
| Price: | Par
|
| Yield: | 12%
|
| Spread: | 754 bps
|
| Call features: | Make-whole at Treasuries plus 50 bps until Nov. 1, 2011, then callable at 106.0, 103.0, par on and after Nov. 1, 2013
|
| Equity clawback: | Until Nov. 1, 2010 for 35% at 112.0
|
| Price talk: | 12% area
|
|
|
| Floating-rate notes
|
| Amount: | $150 million
|
| Maturity: | Nov. 1, 2014
|
| Coupon: | Three-month Libor plus 737.5 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 737.5 bps
|
| Call features: | Make-whole at Treasuries plus 50 bps until Nov. 1, 2009, then callable at 106.0, 103.0, par on and after Nov. 1, 2011
|
| Equity clawback: | Until Nov. 1, 2010 for 35% at par plus applicable coupon
|
| Price talk: | Libor plus 725 bps
|
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