American Tire guides $805 million seven-year notes to yield in 9% area; pricing expected Friday

By Paul A. Harris

Portland, Ore., Feb. 4 – American Tire Distributors, Inc. is expected to price $805 million of seven-year senior subordinated notes (Caa1/CCC+) on Friday, according to a bond trader.

As the market awaits formal price talk, the deal is being guided with a yield in the 9% area, the source added.

BofA Merrill Lynch, Goldman Sachs & Co., Wells Fargo Securities LLC, Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc. and UBS Investment Bank are the joint bookrunners.

The notes come with three years of call protection.

The Huntersville, N.C.-based company plans to use the proceeds to fund the redemption of all $425 million of its outstanding 11½% senior subordinated notes due 2018 (being redeemed at 102 on Feb. 11), also to pay a cash dividend to its parent company, American Tire Distributors Holdings, Inc., and to enable the ultimate parent to fund a cash dividend or other payment to certain of its security holders.

American Tire Distributors is an independent supplier of tires to the North American replacement tire market.

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