By Paul Deckelman
New York, March 24 - Lyondell Chemical Co. priced an upsized $2.75 billion equivalent offering of dollar- and euro-denominated 7.5-year senior secured notes on Wednesday, high yield syndicate sources said. Both tranches priced at par to yield 8%.
The bond deal - announced on March 11, when Lyondell's parent company, Netherlands-based polymer, petrochemicals and fuels producer LyondellBasell Industries, unveiled plans for $3.25 billion of first-priority debt financing, to consist of senior secured notes and term loan borrowings - was heard by the sources on Tuesday to have been upsized by $500 million, from its original size of $2.25 billion to $2.75 billion. At the same time, sources in the bank debt market heard that the company had halved what was originally to be $1 billion of term loan B financing, cutting it down to down to $500 million, keeping the deal's overall size at $3.25 billion.
Lyondell priced $2.25 billion of dollar denominated 8% notes, as well as €375 million of euro-denominated 8% paper.
The dollar portion came at the tight end of price talk which had circulated in the market Tuesday looking for a yield between 8% and 8¼%, while the euro portion did even better than that, pricing inside of its price talk of 8 1/8% to 8 3/8%. Talk for both tranches had also projected a price discount of as much as one point, but such a concession proved to be unnecessary.
The new bonds were well received in the secondary market, jumping more than 2 points in initial aftermarket action.
Bank of America Merrill Lynch, UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Scurities, Inc., JP Morgan Securities Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities, LLC were the joint bookrunners for the deal.
The bonds have three years of call protection, as well as the standard provisions allowing a change-of-control put at 101 and a three-year equity clawback. They were sold under Rule 144A with registration rights and Regulation S.
The Houston-based chemical company plans to use the deal's proceeds, along with proceeds of the new bank facility, to finance the company's emergence from bankruptcy.
| Issuer: | LBI Escrow Corp. (to be merged with and into Lyondell Chemical Co.)
|
| Issue: | Senior secured notes
|
| Maturity: | Nov. 1, 2017
|
| Bookrunners: | Bank of America Merrill Lynch, UBS Securities LLC, Barclays Capital Inc., Citigroup Global Markets, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities, Inc., JP Morgan Securities Inc., Morgan Stanley & Co. Inc. and Wells Fargo Securities, LLC
|
| Coupon: | 8%
|
| Price: | Par
|
| Yield: | 8%
|
| Call features: | Make-whole call at T+50 bps until May 1, 2013, then callable at a declining premium
|
| Equity clawback: | For up to 35% of each tranche at 108% until May 1, 2013
|
| Special redemption: | For up to 10% of each tranche per year at 103% prior to May 1, 2013
|
| Change of control: | Put at 101% of principal plus accrued interest
|
| Trade date: | March 24
|
| Settlement date: | April 8
|
| Ratings: | Moody's: Ba3
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
| Marketing: | Via roadshow
|
|
|
| Dollar notes
|
| Amount: | $2.25 billion
|
| Spread: | 477 basis points
|
| Price talk: | 8% to 8¼%, with 0-1 point OID
|
|
|
| Euro notes
|
| Amount: | €375 million
|
| Spread: | 519 basis points over DBR 4% due Jan. 4, 2018
|
| Price talk: | 8 1/8% to 8 3/8%, with 0-1 point OID
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
