Published on 1/9/2013 in the Prospect News High Yield Daily.
New Issue: HD Supply sells upsized $950 million 10½% eight-year notes at par
By Paul A. Harris
Portland, Ore., Jan. 9 - HD Supply, Inc. priced an upsized $950 million issue of eight-year senior subordinated notes (Caa2/CCC+/) at par to yield 10½% on Wednesday, according to a syndicate source.
The yield printed 12.5 basis points inside of the low end of price talk that had been set in the 10¾% area.
Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC and UBS Securities LLC were the joint bookrunners for the quick-to-market deal, which was upsized from $650 million.
Proceeds will be used to redeem a portion of the company's outstanding senior subordinated notes.
HD Supply is an Atlanta-based industrial distributor serving the infrastructure & energy, maintenance, repair & improvement and specialty construction sectors.
| Issuer: | HD Supply, Inc.
|
| Amount: | $950 million, increased from $650 million
|
| Maturity: | Jan. 15, 2021
|
| Securities: | Senior subordinated notes
|
| Bookrunners: | Bank of America Merrill Lynch, Goldman Sachs & Co., Barclays, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Wells Fargo Securities LLC, UBS Securities LLC
|
| Co-managers: | Baird, BB&T Capital Markets, Raymond James & Associates Inc., SunTrust Robinson Humphrey Inc.
|
| Coupon: | 10½%
|
| Price: | Par
|
| Yield to worst: | 10½%
|
| Spread: | 908 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until Jan. 15, 2016, then callable at a premium
|
| Equity clawback: | 35% at 110.5 until Jan. 15, 2016
|
| Special equity clawback: After July 31, 2013, either 100% of the notes or, if less than 100%, an amount up to 2/3 of the notes may be redeemed with IPO proceeds at 104 until Jan. 31, 2014 and at 102 after Jan. 31, 2014 until July 31, 2014
|
| Trade date: | Jan. 9
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| Settlement date: | Jan. 16
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| Ratings: | Moody's: Caa2
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| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
| Price talk: | 10¾% area
|
| Marketing: | Quick to market
|
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