Published on 9/15/2006 in the Prospect News High Yield Daily.
New Issue: Lyondell Chemical prices $1.775 billion in two tranches; both come on top of price talk
By Paul A. Harris
St. Louis, Sept. 15 - Lyondell Chemical Co. priced $1.775 billion of senior unsecured notes (B1/B+) in two tranches on Friday, according to informed sources.
The Houston-based chemical company priced an $875 million tranche of eight-year notes at par to yield 8%, on top of price talk.
Lyondell also priced a $900 million tranche of 10-year notes at par to yield 8¼%, again on top of price talk.
JP Morgan, Banc of America Securities LLC, Citigroup and Morgan Stanley were joint bookrunners for the notes, which have been registered with the Securities and Exchange Commission.
Proceeds will be used to fund the tender for $849 million of the company's 9 5/8% senior secured notes due May 1, 2007 and to repay a portion of the seven-year term loan used to finance Lyondell's acquisition of Citgo Petroleum Corp.'s 41.25% interest in Lyondell-Citgo Refining LP.
In a document filed Friday with the SEC, the company disclosed that it is considering increasing the size of its revolver to about $1 billion from $800 million.
| Issuer: | Lyondell Chemical Co.
|
| Amount: | $1.775 billion
|
| Security description: | Senior unsecured notes
|
| Bookrunners: | JP Morgan, Banc of America Securities LLC, Citigroup, Morgan Stanley
|
| Co-managers: | BNY Capital Markets, Deutsche Bank Securities, HVB Capital Markets, Natexis Bleichroeder, Scotia Capital, Societe Generale, UBS Investment Bank, Wachovia Securities
|
| Trade date: | Sept. 15
|
| Settlement date: | Sept. 20
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: B+
|
| Distribution: | SEC Registered
|
|
|
| Eight-year notes
|
| Amount: | $875 million
|
| Maturity: | Sept. 15, 2014
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Spread: | 322 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2010, then 104.0, 102.0, par on and after Sept. 15, 2012
|
| Equity clawback: | Until Sept. 15, 2009 for 35% at 108.0
|
| Price talk: | 8% area
|
|
|
| 10-year notes
|
| Amount: | $900 million
|
| Maturity: | Sept. 15, 2016
|
| Coupon: | 8¼%
|
| Price: | Par
|
| Yield: | 8¼%
|
| Spread: | 347 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2011, then callable at 104.125, 102.750, 101.375, par on and after Sept. 15, 2014
|
| Equity clawback: | Until Sept. 15, 2009 for 35% at 108.25
|
| Price talk: | 25 bps behind eight-year notes
|
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