Dow's $4.5 billion private placement tops list of 2009 notable deals

By Lisa Kerner

Charlotte, N.C., Dec. 31 - A number of notable deals were reported by Prospect News in 2009.

In April, Dow Chemical Co. settled a $4.5 billion private placement of convertible preferred stock in two tranches and received $2.5 billion from the sale of non-convertible preferreds.

The Midland, Mich., chemical company sold $4 billion of series A cumulative convertible perpetual preferreds to Berkshire Hathaway Inc., which bought 3 million preferreds, and the Kuwait Investment Authority, which bought 1 million of the preferreds.

Dow Chemical sold $1.5 billion of non-convertible series B cumulative perpetual preferreds to the Haas Family Trusts and $1 billion to funds and accounts managed by Paulson & Co. Inc.

The company also sold $500 million of series C convertible preferreds to the Haas Family Trusts.

The preferreds have a liquidation preference of $1,000 each.

The series A preferreds pay dividends of 8.5%; the series B preferreds pay dividends of 7% in cash plus 8% in cash or kind; and the series C preferreds paid a dividend of 7% in cash and 8% in cash or kind up to June 1, 2009 and pay 12% in cash after that.

Proceeds were used to help finance the company's merger with Rohm & Haas Co.

National Rural Utilities to issue $1 billion

National Rural Utilities Cooperative Finance Corp. announced it May it agreed to a $1 billion seven-year revolving note facility with Federal Agricultural Mortgage Corp. and Farmer Mac Mortgage Securities Corp.

The facility comprised seven-year notes that may have a variable or fixed rate at the time of advance maturing before Dec. 31, 2016.

The notes will be secured by eligible loans within specific limits, according to National Rural, a Herndon, Va.-based cooperative that provides financing for U.S. rural utility systems.

Royal Vopak sells $680 million

Royal Vopak said in November it would issue $680 million of new senior unsecured notes in the U.S. private placement market in various tranches. The issues were expected to settle in December.

The maturities of the notes range from eight to 20 years.

The notes are denominated in three different currencies, with a total of $575 million of the tranches in dollars.

The annual interest rates of the notes are between 4.75% for the eight-year euro tranche and 6.02% for the 20-year dollar tranche with a weighted average annual interest rate of 5.5%, a company news release said.

Vopak said the notes program will further enhance the maturity profile of its outstanding debt.

Based in Rotterdam, the Netherlands, Vopak is an independent tank terminal operator specializing in the storage and handling of liquid and gaseous chemical and oil products.

Huntsman gets $600 million note

In June, Huntsman Corp. received a $500 million term loan and a $600 million unsecured note as part of its settlement with Credit Suisse and Deutsche Bank for fraud and tortious interference in connection with the terminated merger agreements with Basell and Hexion Specialty Chemicals Inc.

The $500 million seven-year senior secured term loan was priced at Libor plus 225 basis points.

Pricing on the $600 million seven-year senior unsecured note was 5.5%.

The company planned to use proceeds from the settlement with the banks to repay some of its outstanding debt.

Huntsman is a Salt Lake City-based manufacturer and marketer of differentiated chemicals.

Willis issues $500 million

Willis Group Holdings Ltd. sold $500 million of 12.875% senior notes due 2016 to Goldman Sachs Mezzanine Partners in a private placement in March.

The notes were issued through Willis subsidiary Trinity Acquisition Ltd.

Proceeds were used to repay a substantial portion of Willis Group subsidiary North America Inc.'s interim credit facility.

Willis is a London-based insurance broker.

Eastman Kodak issues convertibles

In September, Eastman Kodak Co. priced an upsized $400 million of 7.5-year convertible bonds at par to yield 7.5% with an initial conversion premium of 24.96%.

Initially the Rule 144A offering was going to be $300 million in size.

The bonds are non-callable for five years and then provisionally callable at a 130% pricing hurdle through year seven.

Proceeds were going to be used to buy back up to $575 million of Kodak's existing 3.375% convertible notes due 2033 and for other general corporate purposes, the company said.

Eastman Kodak is a Rochester, N.Y.-based photography and imaging technology products and services provider.

World Bank goes green

The World Bank's International Bank for Reconstruction and Development placed $300 million of three-year Green bonds with the state of California through a private transaction in April.

The bonds bear interest at Libor plus 22.5 bps and mature on April 24, 2012.

Proceeds were slated to be used to support development projects financed by the World Bank that address climate change, which could involve solar energy, wind energy or new technologies that help reduce greenhouse gas emissions.

PDL places $300 million

In October, PDL BioPharma, Inc. said its newly formed subsidiary, QHP Royalty Sub LLC, would issue $300 million of its QHP PhaRMA senior secured notes due 2015 in a non-registered offering.

The notes bear interest at a rate of 10.25% and may be redeemed at any time prior to maturity. They are secured in part by PDL's pledge of its equity ownership interest in QHP.

PDL, an Incline Village, Nev., biopharmaceutical company, said it would use the proceeds from the offering to pay a $1.67-per-share dividend on Dec. 15 to company stockholders.

Sealed Air issues $300 million

Sealed Air Corp. announced a private placement of $300 million of 12% notes in February.

The new, noncallable senior unsecured notes maturing on Feb. 14, 2014 were sold to Davis Selected Advisers, LP, Geico Indemnity Co. and General Re Life Insurance Corp.

Sealed Air said it would use proceeds from the deal to help fund all of the company's 2009 debt obligations, including a potential cash settlement payment.

Elmwood Park, N.J.-based Sealed Air manufactures materials and systems for protective, presentation and fresh food packaging and performance solutions in the industrial, food and consumer markets.

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