Sequa sets talk for $711 million notes in two-tranche bridge refinancing

By Paul A. Harris

St. Louis, June 6 - Underwriters have set price talk for about $711 million of Sequa Corp. senior notes due Dec. 1, 2015 (Caa2/B-) in two tranches, according to an informed source.

A $500 million tranche of 11¾% senior cash pay notes is talked to yield 13½%.

Meanwhile an approximately $211.4 million tranche of 13½% senior pay-in-kind notes is talked to price 100 basis points behind the cash pay notes.

The order books close at noon ET on Monday, with pricing expected after that.

On Thursday the notes were issued to the selling noteholders, Lehman Brothers, Citigroup and J.P. Morgan Securities Inc., under their option to receive notes in exchange for loans outstanding under the bridge loan facility, which financed the LBO of Sequa by the Carlyle Group.

The PIK notes provide for in-kind coupon payments through Dec. 1, 2009 and cash payments thereafter.

Sequa, a New York-based diversified aerospace and industrial company, will receive no proceeds.

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