Prince downsizes to $756 million, drops secured notes, talks unsecured notes to yield 8¾%-9%

By Paul A. Harris

Portland, Ore., Feb. 2 – Prince International Corp. downsized its offering of high-yield notes to $756 million from $1.256 billion with the elimination of a $500 million tranche of secured notes, which shifted those proceeds to a concurrent term loan, according to market sources.

The remaining $756 million tranche of eight-year senior unsecured notes (Caa2/CCC+) is talked to yield 8¾% to 9%, well wide of initial guidance in the low-8% area.

Books close at 5 p.m. ET on Wednesday, and the Rule 144A and Regulation S for life deal is set to price on Thursday.

Left bookrunner Barclays will bill and deliver. Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Jefferies LLC, KeyBanc Capital Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc. and BofA Securities Inc. are the joint bookrunners.

The notes become callable after three years at par plus 50% of the coupon.

The issuing entity will be PMHC II, Inc., an affiliate of Prince International.

The Houston-based supplier of mineral-based products, engineered additives, and specialty coatings plans to use the proceeds to help fund its acquisition of Ferro Corp. and to repay debt.

The proceeds are to be escrowed pending the acquisition. There is a mandatory par call if the acquisition is not consummated by Aug. 11, 2022.

With the elimination of the $500 million secured notes, the concurrent term loan grew to $2.445 billion from $1.945 billion.

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