UCP starts roadshow for $200 million offering of five-year notes; early guidance 8¼%-8½%

By Paul A. Harris

Portland, Ore., Oct. 14 – UCP, Inc. began a roadshow on Friday for a $200 million offering of five-year senior notes (expected ratings B3/B), according to market sources.

The deal is in the market with initial yield guidance of 8¼% to 8½%, according to a portfolio manager.

The roadshow wraps up on Oct. 19, and the Rule 144A and Regulation S offering is set to price thereafter.

Citigroup Global Markets Inc. is the left bookrunner. Deutsche Bank Securities Inc. and Builder Advisor Group are the joint bookrunners.

The notes feature a make-whole call at Treasuries plus 50 basis points for the first two years, then become callable at a premium. They also feature a two-year 40% equity clawback and a 101% poison put.

The San Jose, Calif.-based developer and homebuilder plans to use the proceeds to repurchase or repay substantially all of the outstanding debt of UCP, Inc. and its subsidiaries, including UCP’s 8½% senior notes due 2017, and for general corporate purposes, including the acquisition and development of land, and home construction.

The issuing entities will be UCP, LLC and UCP Finance Corp.

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