By Paul A. Harris
St. Louis, May 8 - Ace Hardware Corp. priced a $300 million issue of 9 1/8% eight-year senior secured notes (Ba2/BB-) at 98.6 to yield 9 3/8% on Thursday, according to an informed source.
The yield came 25 basis points wide of the 9% area price talk.
Banc of America Securities LLC was the bookrunner for the Rule 144A for life and Regulation S issue.
Proceeds will be used to repay debt and for general corporate purposes.
The notes come with first-priority security in real property, stock and other tangible and intangible assets (including the trade name) owned by the issuer and subsidiary guarantors, and a second-priority interest in accounts receivable and investments.
The guarantors include all existing and future non-insurance related domestic subsidiaries.
Oak Brook, Ill.-based Ace Hardware is a marketer and distributor of hardware merchandise to its network of independent retailers.
| Issuer: | Ace Hardware Corp.
|
| Amount: | $300 million
|
| Maturity: | June 1, 2016
|
| Security description: | Senior secured notes
|
| Bookrunner: | Banc of America Securities LLC
|
| Coupon: | 9 1/8%
|
| Price: | 98.6
|
| Yield: | 9 3/8%
|
| Spread: | 578 bps
|
| Call protection: | Make-whole at Treasuries plus 50 bps until June 1, 2012, then at 104.563, 102.281, par on and after June 1, 2014
|
| Equity clawback: | Until June 1, 2011 for 35% at 109.125
|
| Trade date: | May 8
|
| Settlement date: | May 15
|
| Ratings: | Moody's: Ba2
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A for life/Regulation S
|
| Price talk: | 9% area
|
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