By Paul A. Harris
Portland, Ore., April 5 - HD Supply, Inc. priced $1,625,000,000 of secured notes on Thursday, according to a buyside source.
The deal included a $950 million tranche of seven-year senior secured first-priority notes (B2/B+/), which priced at par to yield 8 1/8%.
The yield printed in the middle of the 8% to 8¼% yield talk.
The joint bookrunners for the first-lien tranche were 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 priced a downsized $675 million tranche of eight-year senior secured second-priority notes (Caa1/CCC+) at par to yield 11%.
The second-priority notes tranche was downsized from $775 million. The yield printed 12.5 basis points beyond the wide end of price talk, which had been set in the 10¾% area.
On the second-lien tranche, Goldman Sachs, Bank of America Merrill Lynch, Barclays Capital, JPMorgan, Credit Suisse, Deutsche Bank, Wells Fargo and UBS were the joint bookrunners.
The notes in both tranches underwent covenant changes.
Proceeds will be used to refinance HD's 12% senior notes due 2014, its ABL credit facility and its existing senior secured term loan.
The overall $2,625,000,000 of debt used in the refinancing also included a $1 billion term loan B.
HD Supply is an Atlanta-based distributor of building materials and tools.
| Issuer: | HD Supply, Inc.
|
| Amount: | $1,625,000,000
|
| Co-managers: | Baird, BB&T, Raymond James, SunTrust Robinson Humphrey
|
| Trade date: | April 5
|
| Settlement date: | April 12
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Marketing: | Roadshow
|
|
|
| First-lien notes
|
| Amount: | $950 million
|
| Maturity: | April 15, 2019
|
| Securities: | Senior secured first-priority notes
|
| 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, UBS Securities Inc.
|
| Coupon: | 8 1/8%
|
| Price: | Par
|
| Yield: | 8 1/8%
|
| Spread: | 667 bps
|
| Call protection: | Three years
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Price talk: | 8% to 8¼%
|
|
|
| Second-lien notes
|
| Amount: | $675 million, decreased from $775 million
|
| Maturity: | April 15, 2020
|
| Securities: | Senior secured second-priority notes
|
| Bookrunners: | Goldman Sachs, Bank of America Merrill Lynch, Barclays, JPMorgan, Credit Suisse, Deutsche Bank, Wells Fargo, UBS
|
| Coupon: | 11%
|
| Price: | Par
|
| Yield: | 11%
|
| Spread: | 992 bps
|
| Call protection: | Four years
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Price talk: | 10¾% area
|
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