By Paul Deckelman
New York, Nov. 1 - Quality Distribution, LLC and QD Capital Corp. priced $225 million of eight-year second-priority senior secured notes (Caa1/B-) on Monday, junk market primary sources said.
The 9 7/8% notes priced at 99.324 to yield 10%.
The notes came wide of the 9¾% price talk heard in the market on Friday, the sources said.
The forward-calendar offering - shopped around to potential investors via a short roadshow that began around the middle of last week - was sold under Rule 144A and Regulation S deal, with registration rights.
The deal came to market via joint bookrunners Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets Corp. and Jefferies & Co. Inc.
The bonds will carry four years of call protection, although a special call provision lets the issuer call 10% of the notes at 103 during the non-call period.
The issuers are subsidiaries of Quality Distribution, Inc., a Tampa, Fla.-based provider of bulk transportation and related services.
Quality Distribution plans to use the proceeds from the bond sale to redeem all of its 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 interest.
Proceeds will also be used to redeem at par plus accrued interest enough of the 11¾% senior subordinated payment-in-kind notes due 2013 to reduce the balance to $35 million.
The balance of the proceeds would be used to pay down the company's ABL facility.
| Issuer: | Quality Distribution, LLC and QD Capital Corp.
|
| Amount: | $225 million
|
| Security type: | Second-priority senior secured notes
|
| Maturity | Nov. 1, 2018
|
| Joint bookrunners: | Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, RBC Capital Markets Corp. and Jefferies & Co. Inc.
|
| Coupon: | 9 7/8%
|
| Price: | 99.324
|
| Yield: | 10%
|
| Spread: | 781 bps over comparable Treasury issue
|
| Call protection: | Non-callable until Nov. 1, 2014, then callable at 104.938, declining ratably to par
|
| Equity clawback: | For 35% of issue at 109.875 until Nov. 1, 2013
|
| Special Call | For up to 10% of principal annually at 103 until Nov. 1, 2014
|
| Ratings: | Moody's: Caa1
|
| S&P: | B-
|
| Trade date: | Nov. 1
|
| Settlement date: | Nov. 3 (T+2)
|
| Price talk: | 9¾% area
|
| Distribution; | Rule 144A with registration rights, Regulation S
|
| Marketing: | Roadshow began middle of last week
|
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