By Paul A. Harris
Portland, Ore., Sept. 25 – Olin Corp. priced a downsized $1.22 billion amount of senior notes (Ba1/BB+) in two tranches on Friday, according to a market source.
The deal included $720 million of eight-year notes that priced at par to yield 9¾%. The yield printed at the tight end of the 9¾% to 10% revised yield talk. That talk was massively increased from earlier formal yield talk in the 6½% area.
Olin also sold $500 million of 10-year notes at par to yield 10%. The yield printed at the tight end of the 10% to 10¼% revised yield talk, which had also massively increased from earlier formal talk in the 6¾% area.
The overall size of the deal was decreased from $1.5 billion.
As a result of the downsizing of the bond offering, the company intends to raise the difference in proceeds by means of term loan debt and a draw upon its revolver, a source said.
In addition to the downsizing, the deal also underwent changes to the asset sales-, debt limitations- and restricted payments covenants, as well as amendments to the liens language, a trader said.
J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc. and PNC Capital Markets were the joint bookrunners.
The issuing entity will be Blue Cube Spinco Inc.
Proceeds will be used to fund the acquisition of Dow Chemical Co.’s chlorine businesses in a transaction valued at $4.8 billion.
Olin is a Clayton, Mo.-based manufacturer of ammunition, chlorine and sodium hydroxide.
| Issuer: | Blue Cube Spinco Inc. (Olin Corp.)
|
| Amount: | $1.22 billion, decreased from $1.5 billion
|
| Securities: | Senior notes
|
| Bookrunners: | J.P. Morgan Securities LLC, Wells Fargo Securities LLC, Barclays, Goldman Sachs & Co., BofA Merrill Lynch, Citigroup Global Markets Inc., PNC Capital Markets
|
| Co-managers: | MUFG, SMBC Nikko, Mizuho Securities, Santander, Scotia Capital, TD Securities
|
| Trade date: | Sept. 25
|
| Settlement date: | Oct. 5
|
| Ratings: | Moody's: Ba1
|
| Standard & Poor's: BB+
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Marketing: | Roadshow
|
|
|
| Eight-year notes
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| Amount: | $720 million
|
| Maturity: | Oct. 15, 2023
|
| Coupon: | 9¾%
|
| Price: | Par
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| Yield: | 9¾%
|
| Spread: | 775 bps
|
| First call: | Oct. 15, 2020 at 102.438
|
| Price talk: | 9¾% to 10%, revised from 6½% area
|
|
|
| 10-year notes
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| Amount: | $500 million
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| Maturity: | Oct. 15, 2025
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| Coupon: | 10%
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| Price: | Par
|
| Yield: | 10%
|
| Spread: | 782 bps
|
| First call: | Oct. 15, 2020 at 105
|
| Price talk: | 10% to 10¼%, revised from 6¾% area
|
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