Watco talks $400 million 10-year notes to yield in the 6½% area

By Paul A. Harris and Aleesia Forni

Columbus, Ohio, March 18 - Watco Cos. LLC and Watco Finance Corp. set price talk for their proposed $400 million senior notes due 2023 (B3/CCC+) in the area of 6½%, according to a market source.

Wells Fargo Securities LLC is the left bookrunner, while J.P. Morgan Securities LLC, Barclays, BMO Securities and U.S. Bancorp are joint bookrunners.

Fifth Third Securities is co-manager.

The Rule 144A and Regulation S for life notes will be non-callable for five years.

Proceeds, along with the initial loans under the new senior secured credit facility, will be used to repay the entire outstanding balance of the company's existing senior secured credit facility.

Watco is a Pittsburg, Kan.-based railroad operator and rail car maintenance and repair services provider.

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