Builders FirstSource to use some proceeds from $275 million IPO to repay debt

By Ted A. Knutson

Washington, Feb.14 - Builders FirstSource, Inc. announced an initial public offering of common stock designed to help repay debt and for general corporate purposes.

The Dallas-based residential building products manufacturer expects $275 million in gross proceeds from the offering.

On Feb. 11, the company closed on an offering of $275 million of floating-rate notes and entered into a $350 million senior secured credit facility.

Of the new bank credit package, $225 million is a new senior secured term loan facility, $110 million is a revolver and the remaining $15 million is a pre-funded letter of credit facility.

The term loan facility is for six-and-a-half years with annual interest at Libor plus 250 points.

The revolving credit facility, maturing in five years, has a similar interest rate. The undrawn portion of the revolver is subject to a commitment fee from 37.5 points to 50 points per year.

The funded letter-of-credit facility, to be used for general corporate purposes, matures in 6½ years with an interest rate of Libor plus 275 points.

UBS Securities LLC and Deutsche Bank Securities Inc. were the joint arrangers of the bank syndication. UBS and Deutsche Bank units are also are the joint book-running managers for the IPO.

The floating rate notes carry an interest rate of Libor plus 425 points

Builders FirstSource detailed the IPO in an S-1 filing with the Securities and Exchange Commission.

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