By Paul A. Harris
Portland, Ore., Sept. 15 – ASP Unifrax Holdings, Inc. priced $1.2 billion of high-yield notes in two resized tranches on Wednesday, according to a market source.
An upsized $800 million tranche of seven-year senior secured notes (B2/B-) priced at par to yield 5¼%, 12.5 basis points inside of talk in the 5½% area. Initial talk was in the high 5% area. The tranche size increased from $700 million, as $100 million was shifted to the secured tranche from the unsecured tranche.
A downsized $400 million tranche of eight-year senior unsecured notes (Caa2/CCC+) priced at par to yield 7½%, 12.5 bps inside of talk in the 7¾% area. Initial guidance was in the 8% area. The tranche size decreased from $500 million.
The two-part deal was well oversubscribed, with both tranches trading in the context of 102 bid, 102½ offered late Wednesday afternoon, according to a bond trader.
The unsecured notes were better bid, the trader remarked, and had perhaps traded as well as 102½ bid, 103 offered.
J.P. Morgan Securities LLC was the lead.
The Buffalo, N.Y.-based specialty metals company is bringing the deal in conjunction with its announced plans to acquire Lydall, Inc.
Proceeds plus an equity contribution from sponsor Clearlake Capital Group, LP and cash on the balance sheet will be used to help fund the merger with Lydall, to repay Lydall's existing $261 million of debt and its $250 million second-lien term loan, to add cash to the balance sheet, for working capital and for other general corporate purposes.
| Issuer: | Unifrax Escrow Issuer Corp. to be merged with ASP Unifrax Holdings
|
| Amount: | $1.2 billion
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| Lead: | J.P. Morgan Securities LLC
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| Trade date: | Sept. 15
|
| Settlement date: | Sept. 30
|
| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Roadshow
|
|
|
| Secured notes
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| Amount: | $800 million, increased from $700 million
|
| Issue: | Senior secured notes
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| Maturity: | Sept. 30, 2028
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| Coupon: | 5¼%
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| Price: | Par
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| Yield: | 5¼%
|
| Spread: | 421 bps
|
| Call protection: | Three years
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| Ratings: | Moody’s: B2
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| S&P: B-
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| Price talk: | 5½% area
|
|
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| Unsecured notes
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| Amount: | $400 million, decreased from $500 million
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| Issue: | Senior unsecured notes
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| Maturity: | Sept. 30, 2029
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| Coupon: | 7½%
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| Price: | Par
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| Yield: | 7½%
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| Spread: | 637 bps
|
| Call protection: | Three years
|
| Ratings: | Moody’s: Caa2
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| S&P: CCC+
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| Price talk: | 7¾% area
|
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