Published on 9/11/2014 in the Prospect News High Yield Daily.
New Issue: AK Steel prices $430 million 7 5/8% seven-year notes to yield 7¾%
By Paul A. Harris
Portland, Ore., Sept. 11 – AK Steel Corp. priced a $430 million issue of 7 5/8% seven-year senior notes (Caa1/B-/) at 99.325 to yield 7¾% on Thursday, according to a syndicate source.
The yield printed 12.5 basis points beyond the wide end of yield talk in the 7½% area.
Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC were the joint bookrunners.
The West Chester, Ohio-based integrated steel producer plans to use the proceeds to finance the acquisition of the Dearborn integrated steel mill from Severstal North America.
| Issuer: | AK Steel Corp.
|
| Amount: | $430 million
|
| Maturity: | Oct. 1, 2021
|
| Securities: | Senior notes
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC
|
| Co-managers: | BofA Merrill Lynch, Fifth Third Securities Inc., Goldman Sachs & Co.
|
| Coupon: | 7 5/8%
|
| Price: | 99.325
|
| Yield: | 7¾%
|
| Spread: | 551 bps
|
| Call: | Make-whole call at Treasuries plus 50 bps until Oct. 1, 2017, then callable at 103.813, 101.906, declining to par in 2019
|
| Equity clawback: | 35% at 107.625 until Oct. 1, 2017
|
| Trade date: | Sept. 11
|
| Settlement date: | Sept. 16
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Distribution: | SEC registered
|
| Price talk: | 7½% area
|
| Marketing: | Roadshow
|
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