By Paul A. Harris
Portland, Ore., Nov. 30 - Optima Specialty Steel, Inc. priced a downsized and restructured $175 million issue of 12½% five-year senior notes (B2/B/) at 96 to yield 13.622% on Wednesday, according to an informed source.
The coupon, issue price and yield all came on top of price talk.
Jefferies & Co., Inc. ran the books.
The bond issue was downsized from $200 million, while the equity contribution from Optima Acquisitions, LLC was increased by $50 million, bringing the total equity contribution relating to this transaction to $84.9 million.
The maturity of the new 12½% notes was reduced to five years from six years.
Proceeds, together with the sponsor equity, will be used to fund the acquisition of Buffalo, N.Y.-based steel bar producer Niagara Lasalle Corp.
Optima Specialty Steel is an Akron, N.Y.-based steel products manufacturer.
| Issuer: | Optima Specialty Steel, Inc.
|
| Amount: | $175 million, decreased from $200 million
|
| Proceeds: | $168 million
|
| Maturity: | Dec. 15, 2016 (maturity decreased to five years from six years)
|
| Securities: | Senior secured notes
|
| Bookrunner: | Jefferies & Co., Inc.
|
| Coupon: | 12½%
|
| Price: | 96
|
| Yield: | 13.622%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Dec. 15, 2014, then callable at 106.25, par on and after Dec. 15, 2015
|
| Equity clawback: | 35% at 112.5 until Dec. 15, 2014
|
| Change-of-control put: | 101%
|
| Trade date: | Nov. 30
|
| Settlement date: | Dec. 5
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 12½% coupon at 96 to yield 13.622%
|
| Marketing: | Roadshow
|
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