By Paul Deckelman
New York, April 30 – Ahern Rentals, Inc. priced an upsized $550 million offering of eight-year senior secured second-lien notes (B3/B) at par to yield 7 3/8% on Thursday, high-yield syndicate sources said.
The deal was enlarged from an originally planned $500 million. It priced in line with price talk envisioning a yield in the 7 3/8% area, which in turn had tightened from initial guidance of a yield in the mid-7% area.
The Rule 144A and Regulation S for life deal came to market via joint bookrunners BofA Merrill Lynch and J.P. Morgan Securities LLC.
The deal surfaced last week and was shopped around to potential investors via a roadshow.
Other than a make-whole call at Treasuries plus 50 basis points for the first three years after issue, the bonds are non-callable for three years, and then at par plus 75% of the coupon. The bonds also feature a three-year 40% equity clawback.
Earlier in the decade, the privately held Eugene, Ore.-based heavy construction equipment rental company underwent an 18-month-long Chapter 11 restructuring, which began in December of 2011 and concluded in June of 2013.
Ahern plans to use the proceeds from its new bond deal to redeem its existing 9% notes due 2018, to pay down a portion of its outstanding asset-based loan facility and to repay a shareholder contribution.
| Issuer: | Ahern Rentals, Inc.
|
| Amount: | $550 million, upsized from $500 million originally
|
| Maturity: | May 15, 2023
|
| Securities: | Senior secured second-lien notes
|
| Bookrunners: | BofA Merrill Lynch (left books), J.P. Morgan Securities LLC
|
| Co-managers: | MUFG, BBVA Securities Inc. RBS Securities Inc. SunTrust Robinson Humphrey, Inc., Regions Securities LLC
|
| Coupon: | 7 3/8%
|
| Price: | Par
|
| Yield: | 7 3/8%
|
| Spread: | 540 bps over Treasuries
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until May 15, 2018, then callable at 105.531
|
| Equity clawback: | For up to 40% of the issue until May 15, 2018 at 107.375
|
| Trade date: | April 30
|
| Settlement date: | May 14
|
| Ratings: | Moody's:B3
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 7 3/8% area
|
| Marketing: | Roadshow
|
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