By Paul Deckelman
New York, Aug. 10 - H&E Equipment Services, Inc. priced an upsized $530 million of 10-year senior notes (B3/B+) at par to yield 7% on Friday, according to high-yield market sources.
The deal came to market in line with previous indications of a low 7% area yield. There was no official price talk.
The issue was increased from its originally planned $480 million size.
Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC were joint bookrunners.
The company announced its plans to do a bond deal this past Monday, and it was marketed to potential investors via a short roadshow between Tuesday and Thursday.
The new paper is being sold to qualified investors under Rule 144A and Regulation S, with registration rights.
The notes will not be callable for the first five years after issue, except for a make-whole call at Treasuries plus 50 basis points, but will become callable at 103.5 on Sept. 1, 2017 and will follow a call schedule after that. They will become callable at par on Sept. 1, 2020.
There is a standard equity clawback provision allowing the company to redeem up to 35% of the issue at a price of 107 for the first three years after issue, using any equity proceeds.
H&E Equipment Services, a Baton Rouge, La.-based company that rents and sells construction and industrial equipment, plans to use the net proceeds from the offering, along with borrowings under its credit facility, to repurchase or otherwise redeem its $250 million of outstanding 8 3/8% senior notes due 2016; to pay a special one-time cash dividend to its stockholders totaling about $7 per share, or roughly $246 million, upon approval by its board of directors; to pay fees and expenses; and for general corporate purposes.
| Issuer: | H&E Equipment Services, Inc.
|
| Securities: | Senior notes
|
| Amount: | $530 million, increased from $480 million
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| Maturity: | Sept. 1, 2022
|
| Bookrunners: | Deutsche Bank Securities Inc., Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC
|
| Coupon: | 7%
|
| Price: | Par
|
| Yield: | 7%
|
| Spread: | 563 bps over comparable Treasuries
|
| Call features: | Make-whole call at T+50 for first five years; callable on Sept. 1, 2017 at 103.5, then at 102.333 (Sept. 1, 2018), at 101.167 (Sept. 1, 2019), and finally, callable at par on Sept. 1, 2020.
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| Equity clawback: | For up to 35% of the issue at 107, until Sept. 1, 2015
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| Trade date: | Aug. 10
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| Settlement: | Aug. 20
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| Ratings: | Moody's: | B3
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| Standard & Poor's: B+
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| Price talk: | Unofficial expectations in low 7% range.
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| Distribution: | Rule 144A/Regulation S, with registration rights.
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| Marketing: | Short roadshow
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