By Paul A. Harris
Portland, Ore., April 16 – SCIH Salt Holdings, Inc. priced $1.8 billion of high-yield notes in two tranches on Friday, according to market sources.
The deal included $1.1 billion of seven-year senior secured notes (B3/B) that priced at par to yield 4 7/8%, at the tight end of the 4 7/8% to 5% yield talk, which had tightened from earlier talk of 5% to 5¼%. Initial guidance was in the low 5% area. BofA Securities Inc. was the left bookrunner.
The deal also featured a $700 million tranche of eight-year senior unsecured notes (Caa2/CCC+) that priced at par to yield 6 5/8%, in the middle of the 6½% to 6¾% yield talk. Initial guidance was in the high 6% area. Deutsche Bank Securities Inc. was the left bookrunner for the unsecured notes tranche.
Joint bookrunners for both tranches were Morgan Stanley & Co. LLC, BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Citizens Capital Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, KKR Capital Markets LLC and RBC Capital Markets LLC.
Proceeds, plus $993 million new cash from parent Stone Canyon and management affiliate MCD, will be used to fund the acquisition of Chicago-based salt producer Morton Salt, K+S AG's Americas salt business, as well as to retire a $200 million second-lien term loan and to add cash to the balance sheet.
| Issuer: | SCIH Salt Holdings Inc.
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| Amount: | $1.8 billion
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| Left bookrunners: | BofA Securities Inc. for secured notes; Deutsche Bank Securities Inc. for unsecured notes
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| Joint bookrunners: | Morgan Stanley & Co. LLC, BMO Capital Markets Corp., Goldman Sachs & Co. LLC, Citizens Capital Markets Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, KKR Capital Markets LLC and RBC Capital Markets LLC
|
| Trade date: | April 16
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| Settlement date: | April 27
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Roadshow
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|
|
| Senior secured notes
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| Amount: | $1.1 billion
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| Maturity: | May 1, 2028
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| Coupon: | 4 7/8%
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| Price: | Par
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| Yield: | 4 7/8%
|
| Spread: | 363 bps
|
| Call protection: | Three years
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| Ratings: | Moody’s: B3
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| S&P: B
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| Price talk: | 4 7/8% to 5%, revised from 5% to 5¼%
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|
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| Senior unsecured notes
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| Amount: | $700 million
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| Maturity: | May 1, 2029
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| Coupon: | 6 5/8%
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| Price: | Par
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| Yield: | 6 5/8%
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| Spread: | 523 bps
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| Call protection: | Three years
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| Ratings: | Moody’s: Caa2
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| S&P: CCC+
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| Price talk: | 6½% to 6¾%
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