ArvinMeritor talks $250 million eight-year notes to yield 10¾%-11%

By Paul A. Harris

St. Louis, Feb. 25 - ArvinMeritor, Inc. talked its $250 million offering of eight-year senior notes (expected Caa2/confirmed CCC-) to yield 10¾% to 11% on Thursday, according to an informed source.

The note offering is expected to price Friday morning.

The company is concurrently in the market with an offering of 15 million common shares. The stock is expected to price Thursday afternoon.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc., Citigroup Global Markets Inc. and RBS Securities Inc. are joint bookrunners for the public notes. BNP Paribas Securities Corp., Fifth Third, PNC and Scotia Capital are co-managers.

The notes come with four years of call protection and a change-of-control put at 101%.

Proceeds from both the notes and the shares will be used to purchase up to $175 million of the company's 8¾% notes due 2012, to pay down its revolver and its U.S. accounts receivable securitization program and for general corporate purposes.

ArvinMeritor is a Troy, Mich.-based supplier of integrated systems, modules and components to original equipment manufacturers and to the aftermarket for the commercial vehicle, transportation and industrial sectors.

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