By Paul A. Harris
Portland, Ore., March 17 – Rain Carbon Inc. priced a downsized $550 million offering of 7¼% eight-year senior secured second lien notes (B1/B+) at 99.254 to yield 7 3/8% on Friday, according to a syndicate source.
The amount was decreased from $1.05 billion.
The yield printed at the wide end of yield talk that had been set in the 7¼% area.
A restructuring gave the notes second lien security versus their unsecured status in initial marketing.
Citigroup Global Markets Inc. was the left bookrunner. Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the joint bookrunners.
The restructuring also saw the premium of the three-year equity clawback decrease to par plus 35% of the coupon from 40%.
The Stamford, Conn.-based producer of carbon-based and chemical products plans to use the proceeds to repay its existing 8% second lien notes due 2018.
With the downsizing, Rain Carbon will only partially repay its existing 8¼% second lien notes due 2021 rather than fully pay off those notes, as had been planned prior to the downsizing.
In addition the previous $1.05 billion deal would have also taken out the company’s 8½% euro-denominated notes due 2021 but those notes will now remain outstanding.
Nor have any proceeds been designated for general corporate purposes, as was the case previously.
In a separate announcement Rain Carbon said that its tender offer for the 8¼% notes is now capped at $115 million instead of covering the entire $360.78 million issue and that its offer to buy the euro notes has been canceled.
| Issuer: | Rain CII Carbon LLC and CII Carbon Corp.
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| Face amount: | $550 million, decreased from $1.05 billion
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| Proceeds: | $545,897,000
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| Maturity: | April 1, 2025
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| Securities: | Senior secured second lien notes
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| Left bookrunner: | Citigroup
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| Joint bookrunners: | Deutsche Bank, Goldman Sachs
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| Coupon: | 7¼%
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| Price: | 99.254
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| Yield: | 7 3/8%
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| Spread: | 507 bps
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| Call: | Make-whole call at Treasuries plus 50 bps until April 1, 2020, then callable at 105.438
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| Equity clawback: | 35% at 107.25 until April 1, 2020 (decreased from 40%)
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| Trade date: | March 17
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| Settlement date: | March 31
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| Ratings: | Moody’s: B1
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| Standard & Poor’s: B+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 7¼% area
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| Marketing: | Roadshow
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