By Paul A. Harris
St. Louis, March 27 - Steel Dynamics, Inc. priced an upsized $375 million issue of eight-year senior notes (Ba2/BB+) in an a.m. to p.m. Thursday drive-by transaction, according to informed sources.
It was the first all-high-yield a.m. to p.m. drive-by deal to clear the market since Constellation Brands, Inc. priced $500 million of 8 3/8% seven-year senior notes (Ba3/BB-) and Alliance Imaging, Inc. priced a $150 million add-on to its 7¼% senior subordinated notes due Dec. 15, 2012 (B3/B-) both on Nov. 28, nearly four months ago.
The new par-pricing Steel Dynamics issue, upsized from $300 million, came with a yield of 7¾%, at the wide end of the 7 5/8% to 7¾% price talk.
The order book was two-times oversubscribed.
Banc of America Securities LLC, Morgan Stanley and Goldman Sachs & Co. were joint bookrunners for the Rule 144A with registration rights issue. The co-managers were ABN Amro and Wells Fargo Securities.
Proceeds will be used to repay bank debt and for general corporate purposes.
Steel Dynamics is a Butler, Ind.-based rolled steel manufacturer.
| Issuer: | Steel Dynamics, Inc.
|
| Amount: | $375 million, upsized from $300 million
|
| Maturity: | April 15, 2016
|
| Security description: | Senior notes
|
| Bookrunners: | Banc of America Securities LLC, Morgan Stanley, Goldman Sachs & Co.
|
| Co-managers: | ABN Amro, Wells Fargo Securities
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 460 bps
|
| Call features: | Callable on April 15, 2012 at 103.875, 101.938, par on and after April 15, 2014
|
| Equity clawback: | Until April 15, 2011 for 35% at 107.75
|
| Trade date: | March 27
|
| Settlement date: | April 3
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A with registration rights
|
| Price talk: | 7 5/8% to 7¾%
|
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