Watco to price $500 million seven-year notes in Thursday drive-by; initial talk 6½% area

By Paul A. Harris

Portland, Ore., June 11 – Watco Cos., LLC and its wholly owned subsidiary, Watco Finance Corp., plan to price a $500 million offering of seven-year senior notes (Caa1/B-) in a Thursday drive-by, according to market sources.

Initial talk has the notes pricing to yield in the 6½% area, a trader said.

J.P. Morgan Securities LLC is leading the deal.

The Rule 144A and Regulation S notes come with three years of call protection.

The Pittsburgh, Kan.-based integrated transportation services provider plans to use the proceeds to fund a tender offer for its 6 3/8% senior notes due 2023, to redeem any of the remaining 2023 notes, to pay down its senior secured credit facility and for general corporate purposes.

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