By Paul A. Harris
St. Louis, May 19 - Ashland Inc. priced an upsized $650 million issue of 9 1/8% eight-year senior notes (Ba3/BB-/) at 96.577 to yield 9¾% on Tuesday, according to an informed source.
The yield was printed on top of yield talk. The price came somewhat cheap to price talk that specified approximately 3 points of original issue discount.
The order book was multiple-times oversubscribed, the source said.
Banc of America Securities LLC and Scotia Capital were joint bookrunners for the Rule 144A with registration rights issue, which was upsized from $600 million.
The notes come with four years of call protection.
Proceeds will be used to refinance the bridge loan used to fund the acquisition of Hercules Inc. The acquisition closed last November.
Ashland is a Covington, Ky.-based chemical company.
| Issuer: | Ashland Inc.
|
| Face amount: | $650 million, increased from $600 million
|
| Proceeds: | $627.751 million (approximate)
|
| Maturity: | June 1, 2017
|
| Security description: | Senior notes
|
| Bookrunners: | Banc of America Securities LLC, Scotia Capital
|
| Co-manager: | SunTrust Robinson Humphrey
|
| Coupon: | 9 1/8%
|
| Price: | 96.577
|
| Yield: | 9¾%
|
| Spread: | 680 bps
|
| Call features: | Callable on June 1, 2013 at 104.563, 102.281, par on and after June 1, 2015
|
| Equity clawback: | 35% at 109.125 until June 1, 2012
|
| Trade date: | May 19
|
| Settlement date: | May 27
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A with registration rights
|
| Price talk: | 9¾% area with about 3 points of original issue discount
|
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