HD Supply to sell $2.63 billion of new debt in massive refinancing

By Paul A. Harris

Portland, Ore., March 26 - HD Supply, Inc. plans to sell $2,625,000,000 of supply in a three-tranche offering of secured paper coming in the form of secured bonds and a bank loan, syndicate sources said on Monday.

The deal features $1.85 billion of debt that will come in the form of a term loan B and seven-year senior secured first-priority notes, which come with three years of call protection.

These tranches, the sizes of which remain to be determined, are being led by joint bookrunners Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays Capital Inc., J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC and UBS Securities Inc.

In addition HD Supply is offering $775 million of eight-year senior secured second-priority notes, which come with four years of call protection.

On the second-lien tranche Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital, JPMorgan, Credit Suisse, Deutsche Bank, Wells Fargo and UBS are the joint bookrunners.

The roadshow for the notes begins on Thursday, with pricing set for the middle part of the April 2 week.

The term loan kicks off with a bank meeting on Tuesday in New York.

Proceeds from the Rule 144A and Regulation S with registration rights notes and the new term loan B will be used to refinance HD's 12% senior notes due 2014, its ABL credit facility and its existing senior secured term loan.

Credit ratings remain to be determined.

HD Supply is an Atlanta-based distributor of building materials and tools.

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