Rain Carbon talks $450 million six-year second-lien notes to yield 12¼%-12½%; pricing Thursday

By Paul A. Harris

Portland, Ore., Aug. 2 – Rain Carbon Inc. talked its $450 million offering of second-lien senior secured notes due August 2029 (B3/B) to yield 12¼% to 12½% at an issue price of par, according to market sources.

Official talk came in line with early guidance in the low-to-mid 12% area.

The deal also underwent investor-friendly covenant changes, which primarily bear upon how the issuer may incur additional debt and disburse cash.

Books were set to close at Wednesday end-of-business, and the Rule 144A and Regulation S for life deal is scheduled to price Thursday morning.

The six-year notes become subject to a first call in 2.5 years at par plus 50% of the coupon.

Goldman Sachs & Co. LLC is the left bookrunner. BofA Securities Inc., Deutsche Bank Securities Inc. and Mizuho Securities USA Inc. are the joint bookrunners.

The Stamford, Conn.-based producer of carbon-based and chemical products plans to use the proceeds plus cash on hand to fund the tender offer for the Rain CII Carbon LLC/CII Carbon Corp. 7¼% senior secured second-lien notes due April 2025, and to redeem those notes not tendered for, up to the maximum amount of the offer.

The company anticipates that following these transactions $49.8 million of the 2025 notes will remain outstanding.

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