Published on 5/18/2011 in the Prospect News High Yield Daily.
New Issue: Alpha Natural Resources prices $1.5 billion senior notes in two parts
By Paul A. Harris
Portland, Ore., May 18 - Alpha Natural Resources, Inc. priced $1.5 billion of senior notes (Ba3/BB/) in two tranches on Wednesday, according to an informed source.
The Abingdon, Va.-based coal producer priced an $800 million tranche of eight-year notes at par to yield 6%. The yield printed on top of the price talk
The company also priced a $700 million tranche of 10-year notes at par to yield 6¼%.
The 10-year notes also priced on top of price talk, which had them pricing 25 basis points behind the eight-year notes.
Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc. were the joint bookrunners.
Proceeds will be used to finance a portion of the acquisition of Massey Energy Co., including the repayment of some outstanding Massey Energy debt.
| Issuer: | Alpha Natural Resources, Inc.
|
| Amount: | $1.5 billion
|
| Securities: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co. Inc., Citigroup Global Markets Inc.
|
| Co-managers: | Bank of America Merrill Lynch, Mitsubishi UFJ Securities, PNC Capital Markets, RBS Securities Inc.
|
| Trade date: | May 18
|
| Settlement date: | June 1
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB
|
| Distribution: | SEC registered
|
| Marketing: | Roadshow
|
|
|
| Eight-year notes
|
| Amount: | $800 million
|
| Maturity: | June 1, 2019
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Spread: | 308.6 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until June 1, 2014, then callable at 103, 101.5, par on and after June 1, 2016
|
| Equity clawback: | 35% at 106.0 until June 1, 2014
|
| Price talk: | 6% area
|
|
|
| 10-year notes
|
| Amount: | $700 million
|
| Maturity: | June 1, 2021
|
| Coupon: | 6¼%
|
| Price: | Par
|
| Yield: | 6¼%
|
| Spread: | 325.3 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until June 1, 2016, then callable at 103.125, 102.083, 101.042, par on and after June 1, 2019
|
| Equity clawback: | 35% at 106.25 until June 1, 2016
|
| Price talk: | 25 bps behind the eight-year notes
|
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