By Paul Deckelman
New York, April 29 - SunCoke Energy Partners, LP priced its $250 million add-on to the company's existing 7 3/8% senior notes due Feb. 1, 2020 on Tuesday, high-yield syndicate sources said.
The bonds priced at 105.25, in line with pre-deal market price talk of an issue price in the 105 area, plus or minus ½ point. The yield to worst was 6.077%, while the yield to maturity was 6.267%.
The pricing generated proceeds of some $263.13 million.
The deal was announced on Monday and priced after a short roadshow marketing campaign that included investor lunches on Monday in New York and Tuesday in Boston.
The offering was brought to market via joint bookrunners Citigroup Global Markets Inc., Barclays, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC and RBC Capital Markets Corp.
The notes will be co-issued by the company's wholly owned SunCoke Energy Partners Finance Corp. subsidiary.
The notes were being sold under Rule 144A and Regulation S for the life of the issue and are being offered as additional notes under the indenture under which the company issued its original $150 million of the notes in January 2013.
The add-on 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 as well, 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 modifications 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 some 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 applicable 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.
The company plans to use a portion of the net proceeds from the offering to fund the cash consideration to be paid in connection with its acquisition of an additional 33% ownership interest in each of its Haverhill and Middletown cokemaking facilities and to repay some 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.
| Issuers: | SunCoke Energy Partners LP, SunCoke Energy Partners Finance Corp.
|
| Amount: | $250 million
|
| Proceeds: | $263,128,000
|
| Maturity: | Feb. 1, 2020
|
| Securities: | Add-on to senior notes (brings outstanding face amount to $400 million)
|
| Joint bookrunners: | Citigroup Global Markets Inc., Barclays, Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, RBC Capital Markets Corp.
|
| Co-managers: | BofA Merrill Lynch, RBS Securities Inc., Wells Fargo Securities LLC
|
| Coupon: | 7 3/8%
|
| Price: | 105.25
|
| Yield to worst: | 6.077%
|
| Yield to maturity: | 6.267%
|
| Spread to worst: | 433 bps
|
| Spread to maturity: | 453 bps
|
| Call protection: | Beginning Feb. 1, 2016 at 105.531, 103.688, 101.844 and finally, at par on or after Feb. 1, 2019
|
| Make-whole call: | Treasuries plus 50 bps until Feb. 1, 2016
|
| Equity clawback: | For up to 35% at 107.375 before Feb. 1, 2016
|
| Trade date: | April 29
|
| Settlement date: | May 9 (T+8)
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Marketing: | Roadshow
|
| Price talk | 105 area
|
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