By Paul A. Harris
Portland, Ore., July 19 – HD Supply Waterworks, Ltd. priced an upsized $500 million issue of eight-year senior notes (Caa1/B-) at par to yield 6 1/8% on Wednesday, according to a syndicate source.
The issue size was increased from $475 million.
The yield printed 12.5 basis points below the tight end of the 6¼% to 6½% yield talk and deep inside of 6¾% to 7% early guidance.
BofA Merrill Lynch, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets, Goldman Sachs & Co., Natixis and Nomura were the joint bookrunners.
The issuing entity was CD&R Waterworks Merger Sub, LLC, which is to be succeeded via merger by HD Supply Waterworks, Ltd.
Proceeds will be used to fund the acquisition of Waterworks, which Clayton, Dubilier & Rice is buying for $2.5 billion from HD Supply.
Waterworks is a St. Louis-based distributor of water, sewer, storm and fire protection products.
| Issuer: | CD&R Waterworks Merger Sub, LLC, to be succeeded via merger by HD Supply Waterworks, Ltd.
|
| Amount: | $500 million, increased from $475 million
|
| Maturity: | Aug. 15, 2025
|
| Securities: | Senior notes
|
| Bookrunners: | BofA Merrill Lynch, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., RBC Capital Markets, Goldman Sachs & Co., Natixis, Nomura
|
| Coupon: | 6 1/8%
|
| Price: | Par
|
| Yield: | 6 1/8%
|
| Spread: | 395 bps
|
| Call protection: | Three years
|
| Trade date: | July 19
|
| Settlement date: | Aug. 1
|
| Ratings: | Moody's: Caa1
|
| S&P: B-
|
| Distribution: | Rule 144A for life
|
| Price talk: | 6¼% to 6½%
|
| Marketing: | Roadshow
|
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