MRC Global to pay down loans with $363 million preferreds issuance

By Wendy Van Sickle

Columbus, Ohio, May 19 – MRC Global Inc. plans to pay down its term loan and asset-based lending facility with proceeds from the issuance of preferred stock, the company announced in a press release.

On Tuesday, the company entered into an agreement to issue $363 million of 6.5% series A convertible perpetual preferred stock to an affiliate of Cornell Capital LLC, the release said.

Henry Cornell, founder of Cornell Capital, was instrumental in creating MRC Global in 2006 when he led Goldman Sachs Capital Partners’ investment in the company, according to the news release. He has served on MRC’s board for eight years.

The stock has a conversion price of $17.88, which represents a 10.6% premium to the closing price of MRC’s common stock as of Monday, and is convertible into approximately 20.3 million shares of MRC common stock, representing approximately 16.6% of common shares on an “as if converted” basis.

The transaction is expected to close in the second half of 2015, the company said. Barclays acted as financial adviser to MRC in the transaction.

MRC is a Houston-based distributor of pipe, valve, fittings and related products and services to the energy industry.

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