National Waterworks to buy back $250 million 12½% notes, tender for 10½% notes as part of IPO

By Ted A. Knutson

Washington, April 6 - National Waterworks Holdings, Inc. said it plans to repurchase its $250 million principal amount of 12 ½% senior subordinated notes due Jan. 1, 2014 using proceeds from a $400 million initial public offering of common stock unveiled Wednesday and a new or amended credit facility.

The new funds will also go towards repaying the firm's existing bank debt.

Prior to the IPO, Waco, the Texas-based water and sewer equipment manufacturer added it plans to conduct a tender offer for its $200 million principal amount of 10½% senior subordinated notes due Nov. 22, 2012.

The 12½% notes were issued Oct. 29, 2004. The company said it will repurchase $139 million of the debt from three affiliates of Goldman, Sachs & Co.

National Waterworks' current credit facility is composed of a $250 million term loan facility and a $75 million revolving credit facility. As of Dec. 31, $210 million of the term loan facility and none of the revolver were outstanding. The term loan facility matures Nov. 22, 2009. The revolver has a Nov. 22, 2008 due date.

J.P. Morgan Securities Inc. and Goldman Sachs Credit Partners LP are the co-syndication agents, joint bookrunners and joint lead arrangers for the facility

J.P. Morgan Partners, LLC and Thomas H. Lee Partners, LP are the company's financial sponsors.

National Waterworks made the announcement in an S-1 prospectus filed with the Securities and Exchange Commission.

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