By Paul A. Harris
Portland, Ore., Feb. 17 - Tembec Industries Inc. priced a $50 million add-on to its 11¼% senior secured notes due Dec. 15, 2018 (B3/B-/) at 105.5 to yield 9.781% on Friday, according to an informed source.
The reoffer price came at the cheap end of the 105.5 to 105.75 price talk.
Bank of America Merrill Lynch ran the books for the quick-to-market add-on.
The Rule 144A with registration rights notes become callable on Dec. 15, 2014 at 105.625. They will be fungible with Tembec's existing 11¼% notes upon registration.
The Quebec-based forest products company plans to use the proceeds for general corporate purposes, including additional liquidity to support its previously announced capital expenditures.
The original $255 million issue priced at 98.717 to yield 11½% in August 2010.
| Issuer: | Tembec Industries Inc.
|
| Face amount: | $50 million
|
| Proceeds: | $52.75 million
|
| Maturity: | Dec. 15, 2018
|
| Security description: | Add-on to 11¼% senior secured notes due Dec. 15, 2018
|
| Bookrunner: | Bank of America Merrill Lynch
|
| Coupon: | 11¼%
|
| Price: | 105.5
|
| Yield: | 9.781%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Dec. 15, 2014, then callable at 105.625, 102.813, par on and after Dec. 15, 2016 (Special call: 10% of issue callable at 103 for the first three years)
|
| Equity clawback: | 35% at 111.25 until Dec. 15, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | Feb. 17
|
| Settlement date: | Feb. 23
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Distribution: | Rule 144A with registration rights
|
| Price talk: | 105.5 to 105.75
|
| Marketing: | Quick to market
|
| Original issue: | $255 million issue priced at 98.717 to yield 11½% in August 2010
|
| Total issue size: | $305 million
|
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