New Issue: Georgia Gulf prices downsized $700 million two-part note offering

By Paul A. Harris

St. Louis, Sept. 28 - Georgia Gulf Corp. priced a downsized $700 million two-part bond transaction on Thursday, according to a market source.

The Atlanta-based chemical company priced a $500 million tranche of 9½% eight-year senior notes (B1/B+) at 99.304 to yield 9 5/8%. The yield came 12.5 basis points beyond the wide end of the 9¼% to 9½% price talk.

Georgia Gulf also priced a $200 million tranche of 10¾% 10-year senior subordinated notes (B2/B) at 98.494 to yield 11%, at the wide end of the price talk that had the subordinated notes coming 125 basis points behind the senior notes.

Merrill Lynch & Co. has the physical books for the notes, which will be marketed via Rule 144A with registration rights and via Regulation S. Lehman Brothers and Bank of America Securities LLC are joint bookrunners.

Proceeds will be used to help fund the acquisition of Toronto-based home improvement and building products producer Royal Group Technologies Ltd. and to repay some existing debt of Royal Group and Georgia Gulf.

The two-part transaction was downsized from $750 million, with the company funding the $50 million decrease by drawing upon its $350 million revolving credit facility.

Issuer:	Georgia Gulf Corp.
Face amount:	$700 million (decreased from $750 million)
Proceeds:	$693.51 million (approximate)
Bookrunners:	Merrill Lynch & Co. (physical books), Lehman Brothers, Banc of America Securities LLC (joint books)
Co-managers:	JP Morgan, Wachovia Securities, Mitsubishi UFJ Securities, ABN Amro, Mizuho International, Scotia Capital
Trade date:	Sept. 28
Settlement date:	Oct. 3
Senior notes
Face amount:	$500 million
Proceeds:	$496.52 million (approximate)
Issue:	Senior notes
Maturity:	Oct. 15, 2014
Coupon:	9½%
Price:	99.304
Yield:	9 5/8%
Spread:	502 bps
Call features:	Callable on and after Oct. 15, 2010 at 104.75, 102.375, par on and after Oct. 15, 2012
Equity clawback:	Until Oct. 15, 2009 for 35% at 109.50
Ratings:	Moody's: B1
	Standard & Poor's: B+
Price talk:	9¼%-9½%
Senior subordinated notes
Face amount:	$200 million
Proceeds:	$196.99 million (approximate)
Issue:	Senior subordinated notes
Maturity:	Oct. 15, 2016
Coupon:	10¾%
Price:	98.494
Yield:	11%
Spread:	638 bps
Call features:	Callable on and after Oct. 15, 2011 at 105.375, 103.583, 101.792, par on and after Oct. 15, 2014
Equity clawback:	Until Oct. 15, 2009 for 35% at 110.75
Ratings:	Moody's: B2
	Standard & Poor's: B
Price talk:	125 bps behind the senior notes

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