Artera launches downsized $600 million seven-year secured notes at 8½%; pricing Wednesday

By Paul A. Harris

Portland, Ore., Feb. 7 – Artera Services, LLC downsized its offering of seven-year senior secured first-priority notes (B3/B-) to $600 million from $740 million and launched the deal at 8½% on Wednesday, according to market sources.

The deal launched at the tight end of price talk in the 8 5/8% area. Initial guidance was in the 9% area.

Prior to downsizing, the offering was playing to demand in excess of $2 billion, a trader said.

The deal is expected to price later in the Wednesday session.

The Rule 144A and Regulation S for life notes become subject to an initial call after three years at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period. The notes feature a 40% equity clawback at par plus the full coupon during the non-call period and have a 101% poison put.

BofA Securities Inc., UBS Securities LLC, BMO Capital Markets Corp., BNP Paribas Securities Corp., Citizens Capital Markets Inc., Deutsche Bank Securities Inc., Jefferies LLC, Mizuho Securities USA Inc., MUFG Securities Americas Inc. and PNC Capital Markets LLC are the joint bookrunners.

The $140 million downsize amount shifted to a concurrent seven-year first-lien term loan, which was upsized to $930 million from $740 million, representing the transfer of proceeds to the loan from the bonds plus an additional $50 million of overall debt that the company intends to place via the upsized loan.

The Atlanta-based infrastructure services provider plans to use the bond and loan proceeds plus balance sheet cash, a sponsor first-lien PIK term loan, and a sponsor contribution to repay its original first-lien term loan and second-lien term loan, to repay its receivables facility and to fully redeem the notes that are outstanding.

The additional $50 million will be used for general corporate purposes.

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