Novolex expected to bring $1.98 billion in secured and unsecured notes March 28 week

By Paul A. Harris

Portland, Ore., March 24 – Novolex Holdings LLC is expected to make a $1.98 billion two-part offering of high-yield notes during the March 28 week in support of the buyout of the company by Apollo, according to market sources.

Early expectations have the deal coming with a $750 million tranche of 6¾% secured notes to price at OID 97.5 and yield in the low-7% area and a $1.23 billion tranche of 8¾% unsecured notes to price at OID 96 and yield in the mid-9% area.

Orders for the secured notes already exceeded the expected size of the tranche on Thursday morning, according to a sellside source, who added that the unsecured tranche is already 50% spoken for at its expected size.

Morgan Stanley & Co. LLC is expected to lead the offering.

A $2.63 billion term loan (expected B2/B), also backing the buyout, launched on Monday with commitments due on March 30. The borrowing entity is Clydesdale Acquisition Holdings Inc.

Proceeds from the bonds and loan will be used to help fund the buyout of the company by Apollo Global Management from Carlyle. Carlyle will retain a minority stake in the company.

Closing is expected in the second quarter.

Novolex is a Hartsville, S.C.-based manufacturer of packaging products for the foodservice, delivery and carryout, food processor and industrial markets.

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