By Paul A. Harris
Portland, Ore., Aug. 3 – Rain Carbon Inc. priced a $450 million issue of six-year second-lien senior secured notes (B3/B) at par to yield 12¼% on Thursday, according to market sources.
The yield printed at the tight end price talk that had the notes coming at par to yield 12¼% to 12½%. Early guidance was in the low-to-mid 12% area.
The new Rain Carbon 12¼% notes traded sharply higher, going out Thursday at 102 bid, 102¼ offered, according to a trader, who added that the premium speaks to demand that built late.
“There are plenty of investors who like secured, high-coupon debt,” the trader remarked.
Allocations were heard to be a mixed bag, the source said, adding that some accounts were apparently blanked.
The deal underwent investor-friendly covenant changes, which primarily bear upon how the issuer may incur additional debt and disburse cash.
Goldman Sachs & Co. LLC was the left bookrunner. Joint bookrunners were BofA Securities Inc., Deutsche Bank Securities Inc. and Mizuho Securities USA Inc.
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.
| Issuer: | Rain Carbon Inc.
|
| Amount: | $450 million
|
| Issue: | Second-lien senior secured notes
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| Maturity: | Sept. 1, 2029
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| Left bookrunner: | Goldman Sachs & Co. LLC
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| Joint bookrunners: | BofA Securities Inc., Deutsche Bank Securities Inc. and Mizuho Securities USA Inc.
|
| Coupon: | 12¼%
|
| Price: | Par
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| Yield: | 12¼%
|
| Spread: | 795 bps
|
| First call: | March 1, 2026 at 106.125
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| Trade date: | Aug. 3
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| Settlement date: | Aug. 17
|
| Ratings: | Moody’s: B3
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| S&P: B
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| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 12¼% to 12½% at par
|
| Marketing: | Roadshow
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