SunCoke Energy Partners to price $250 million 2020 add-on Tuesday

By Paul Deckelman

New York, April 28 - SunCoke Energy Partners, LP is set to price a $250 million add-on to its existing 7 3/8% senior notes due Feb. 1, 2020 on Tuesday, according to high-yield syndicate sources.

The notes will be co-issued by the company's wholly owned SunCoke Energy Partners Finance Corp. subsidiary.

Joint bookrunners for the sale are Citigroup Global Markets Inc., Barclays Capital Inc. Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and RBC Capital Markets Corp.

B of A Merrill Lynch, RBS Securities Inc. and Wells Fargo Securities LLC will be co-managers on the deal, which will be sold under Rule 144A and Regulation S.

The deal was being marketed to potential investors via a roadshow that began with an investor lunch in New York on Monday and which will include a similar lunch on Tuesday in Boston.

The $150 million of notes priced in January 2013.

The new notes will have the same terms as the existing notes - they will not be callable until Feb. 1, 2016 and there will be an equity clawback provision in effect until that date, allowing for the redemption of up to 35% of the issue at 107.375 using any equity proceeds. There is also a 101 change-of-control investor put provision, and the indenture covenants will be the same, including proposed modification to the credit facility basket.

The new notes will be fully and unconditionally guaranteed by all of SunCoke's current subsidiaries, other than co-issuer SunCoke Energy Partners Finance Corp., as well as by certain of its future subsidiaries.

However, the notes will initially have a different Cusip number than the existing issue and will not be initially fungible with the existing notes for trading purposes. Following the expiration of the restrictions on transferability and resale, the company intends to facilitate the combination of both the existing notes and the new notes under the same unrestricted Cusip and the notes should then be fungible.

Lisle, Ill.-based SunCoke is a publicly-traded master limited partnership that manufactures coke used in the blast furnace production of steel and provides coal handling services to the coke, steel and power industries. Its general partner is a wholly owned subsidiary of Sun Coke Energy, Inc.

It plans to use a portion of the net proceeds from the offering to fund the cash consideration to acquire an additional 33% ownership interest in each of its Haverhill and Middletown cokemaking facilities and to repay certain debt assumed from its sponsor, SunCoke Energy, as part of this acquisition. On Friday, SunCoke Energy Partners announced plans for a cash tender offer for up to $160 million of its $400 million of outstanding 7 5/8% senior notes due 2019.

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