By Paul A. Harris
Portland, Ore., Jan. 25 – Hexion Inc. priced an upsized $710 million amount of secured notes in a restructured two-part transaction on Wednesday, according to a market source.
The deal included $485 million of five-year first-priority senior secured notes (Caa1/CCC+) that priced at par to yield 10 3/8%.
The yield printed at the tight end of yield talk in the 10½% area.
The tranche was initially upsized to $510 million from $460 million and subsequently downsized to the $485 million final amount, with the shift of $25 million of proceeds to the 1.5-lien notes, the junior tranche of Wednesday's transaction.
The junior tranche featured $225 million of five-year 1.5-lien senior secured notes (Caa3/CCC), which priced at par to yield 13¾%.
The yield printed at the wide end of the 13½% to 13¾% yield talk.
The 1.5-lien tranche was upsized from $200 million, with the shift of proceeds mentioned above.
Hexion was initially in the market with a single $460 million tranche of first-priority notes.
Timing on the deal was walked back twice; it was initially expected to price on Monday.
J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BofA Merrill Lynch, Citizens Bank, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. and Wells Fargo Securities LLC are the joint bookrunners for the Rule 144A and Regulation S offering.
The Columbus, Ohio-based producer of thermoset resins plans to use the proceeds, plus cash on its balance sheet, to purchase or redeem all of its 8 7/8% senior secured notes due 2018.
| Issuer: | Hexion Inc.
|
| Amount: | $710 million, increased from $460 million
|
| Maturity: | Feb. 1, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BofA Merrill Lynch, Citizens, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., Wells Fargo Securities LLC
|
| Trade date: | Jan. 25
|
| Settlement date: | Feb. 8
|
| Distribution: | Rule 144A for life
|
| Marketing: | Roadshow
|
|
|
| First-lien notes
|
| Amount: | $485 million, decreased from $510 million
|
| Securities: | First-priority senior secured notes
|
| Coupon: | 10 3/8%
|
| Price: | Par
|
| Yield: | 10 3/8%
|
| Spread: | 839 bps
|
| Call protection: | Two years
|
| Ratings: | Moody's: Caa1
|
| S&P: CCC+
|
| Price talk: | 10½% area
|
|
|
| 1.5-lien notes
|
| Amount: | $225 million
|
| Securities: | 1.5-lien senior secured notes
|
| Coupon: | 13¾%
|
| Price: | Par
|
| Yield: | 13¾%
|
| Spread: | 1,176 bps
|
| Call protection: | Two years
|
| Ratings: | Moody's: Caa3
|
| S&P: CCC
|
| Price talk: | 13½% to 13¾%
|
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