By Paul A. Harris
St. Louis, Oct. 19 - Underwriters priced US Investigations Services, Inc. (USIS)'s $440 million of notes in a restructured two-part transaction on Friday that saw $40 million shifted to the senior notes tranche from the senior subordinated notes tranche, according to an informed source.
The deal included an upsized $290 million issue of 10½% eight-year senior notes, which priced at 95.47 to yield 11 3/8%.
The senior notes' yield came 12.5 basis points beyond the wide end of the 11% to 11¼% price talk.
Moody's Investors Service had assigned its Caa1 rating to the senior notes. However due to retranching the rating is expected to change to Caa2. Standard & Poor's assigned its CCC+ rating to the senior notes.
Meanwhile a downsized and restructured $150 million issue of 11¾% 8.5-year senior subordinated notes (Caa2/CCC+) priced at 93.666 to yield 13%. The yield came 25 bps beyond the wide end of the 12½% to 12¾% price talk. The tranche was downsized from $190 million, and the maturity was decreased to 8.5 years from 10 years.
Lehman Brothers and Banc of America Securities LLC were joint bookrunners for the Rule 144A for life and Regulation S notes.
Proceeds will be used to help fund the leveraged buyout of the company by Providence Equity Partners from Welsh Carson.
USIS is a Falls Church, Va., background investigation and security services provider.
| Issuer: | US Investigations Services, Inc.
|
| Amount: | $440 million
|
| Bookrunners: | Lehman Brothers, Banc of America Securities LLC
|
| Change-of-control put: | 101.0
|
| Trade date: | Oct. 19
|
| Settlement date: | Oct. 24
|
| Distribution: | Rule 144A for life/Regulation S
|
|
|
| Senior notes
|
| Amount: | $290 million (upsized from $250 million)
|
| Maturity: | Nov. 1, 2015
|
| Security description: | Senior notes
|
| Coupon: | 10½%
|
| Price: | 95.47
|
| Yield: | 11 3/8%
|
| Spread: | 697 bps
|
| Call features: | Callable on Nov. 1, 2011 at 105.25, 102.625, par on and after Nov. 1, 2013
|
| Equity clawback: | Until Nov. 1, 2010 for 40% at 110.50
|
| Ratings: | Moody's: Caa1 (expected to change to Caa2 due to retranching)
|
| Standard & Poor's: CCC+
|
| Price talk: | 11% to 11¼%
|
|
|
| Senior subordinated notes
|
| Amount: | $150 million (decreased from $190 million)
|
| Maturity: | May 1, 2016 (maturity decreased to 8.5 years from 10 years)
|
| Coupon: | 11¾%
|
| Price: | 93.666
|
| Yield: | 13%
|
| Call features: | Callable on May 1, 2012 at 105.875, 102.938, par on and after May 1, 2014
|
| Equity clawback: | Until May 1, 2011 for 40% at 111.75
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: CCC+
|
| Price talk: | 12½% to 12¾%
|
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