Quality Distribution offers $225 million eight-year secured notes

By Paul A. Harris

St. Louis, Oct. 26 - Quality Distribution, Inc. plans to price a $225 million offering of eight-year second-priority senior secured notes during the Nov. 1 week following an investor roadshow, according to an informed source.

Credit Suisse Securities, Bank of America Merrill Lynch, RBC Capital Markets Corp. and Jefferies & Co. are the joint bookrunners for the notes, which are formatted according to Rule 144A and Regulation S with registration rights.

The notes come with four years of call protection. However, a special call provision entitles the issuer to call 10% of the notes at 103 during the non-call period.

Proceeds will be used to redeem all of the issuers' outstanding 10% senior notes due 2013, its 9% senior subordinated notes due 2010 and its senior floating-rate notes due 2012, all of which may be redeemed at par, plus accrued and unpaid interest.

Proceeds will also be used to redeem at par, plus accrued and unpaid interest, the 11¾% senior subordinated payment-in-kind notes due 2013 sufficient to reduce the balance of those notes to $35 million. The balance of the proceeds would be used to pay down the company's ABL facility.

Quality Distribution is a Tampa, Fla.-based provider of bulk transportation and related services.

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