By Paul A. Harris
Portland, Ore., June 2 – Advanced Drainage Systems Inc. priced a $500 million issue of eight-year senior notes (Ba2/B+) at par to yield 6 3/8% in a Thursday drive-by, according to market sources.
The deal was heard to be more than four-times oversubscribed and priced at the tight end of yield talk in the 6½% area. Initial guidance was in the high 6% area.
The bonds broke sharply higher into the secondary market and were trading at 101 7/8 bid, 102 3/8 offered heading into the Thursday close, according to a sellside source.
Left bookrunner Morgan Stanley & Co. LLC will bill and deliver. Joint bookrunners were BofA Securities Inc., Barclays, PNC Capital Markets LLC, Fifth Third Securities Inc., BMO Capital Markets Corp. and HSBC Securities (USA) Inc.
The Hilliard, Ohio-based supplier of water management systems plans to use the proceeds to pay down its revolver and for general corporate purposes.
| Issuer: | Advanced Drainage Systems Inc.
|
| Amount: | $500 million
|
| Issue: | Senior notes
|
| Maturity: | June 15, 2030
|
| Left bookrunner: | Morgan Stanley & Co. LLC (bill and deliver)
|
| Joint bookrunners: | BofA Securities Inc., Barclays, PNC Capital Markets LLC, Fifth Third Securities Inc., BMO Capital Markets Corp. and HSBC Securities (USA) Inc.
|
| Co-managers: | UBS Securities LLC, Robert W. Baird & Co. Inc. and Loop Capital Markets LLC
|
| Coupon: | 6 3/8%
|
| Price: | Par
|
| Yield: | 6 3/8%
|
| Spread: | 348 bps
|
| First call: | July 15, 2025 at 103.188
|
| Trade date: | June 2
|
| Settlement date: | June 9
|
| Ratings: | Moody's: Ba2
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 6½% area
|
| Marketing: | Drive-by
|
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