By Paul A. Harris
Portland, Ore., April 2 – Hexion Inc. priced a $315 million issue of five-year first-priority senior secured notes (B3/CCC+) at par to yield 10% on Thursday, according to market sources.
The yield printed at the wide end of the 9¾% to 10% yield talk and wide of initial guidance in the 9¼% area, sources said.
There are also covenant changes.
A special call provision that would have made 10% of the notes callable annually at 103 during the two-year non-call period was eliminated.
J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Investment Bank, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC were the joint bookrunners.
The Columbus, Ohio-based chemical company plans to use about $40 million of the proceeds to repay or redeem all of its outstanding 8 3/8% sinking fund debentures due 2016, with any remaining proceeds to be used to repay its ABL facility in full, and for general corporate purposes.
Hexion, formerly known as Momentive Specialty Chemicals Inc., provides thermoset technologies, specialty products and technical support for customers in the global wood and industrial markets.
| Issuer: | Hexion Inc.
|
| Amount: | $315 million
|
| Maturity: | April 15, 2020
|
| Securities: | First-priority senior secured notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., UBS Investment Bank, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC
|
| Co-manager: | Apollo
|
| Coupon: | 10%
|
| Price: | Par
|
| Yield: | 10%
|
| Spread: | 865 bps
|
| First call: | April 15, 2017 at 105
|
| Trade date: | April 2
|
| Settlement date: | April 15
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 9¾% to 10%
|
| Marketing: | Roadshow
|
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