Published on 4/1/2010 in the Prospect News High Yield Daily.
New Issue: SquareTwo sells downsized $290 million 11 5/8% seven-year notes at 98.265 to yield 12%
By Paul A. Harris
St. Louis, April 1 - SquareTwo Financial Corp. priced a downsized $290 million issue of 11 5/8% seven-year senior second-lien notes (B2/B) at 98.265 to yield 12% on Friday, according to an informed source.
The yield printed 25 basis points beyond the wide end of the 11½% to 11¾% price talk.
Bank of America Merrill Lynch and BMO Capital Markets Corp. were joint bookrunners for the issue, which was downsized from $300 million.
Co-managers were Fifth Third Bancorp and US Bancorp Investments Inc.
Proceeds, together with the revolving credit facility proceeds, will be used to repay debt under the company's existing credit facility and its existing senior subordinated notes, as well as for general corporate purposes, including to fund the purchase of charged-off accounts receivables.
SquareTwo is a Denver-based purchaser of charged-off accounts receivable in the United States.
| Issuer: | SquareTwo Financial Corp.
|
| Face amount: | $290 million, decreased from $300 million
|
| Proceeds: | $284,969,000 (approximate)
|
| Maturity: | April 1, 2017
|
| Securities: | Senior second-lien notes
|
| Bookrunners: | Bank of America Merrill Lynch, BMO Capital Markets Corp.
|
| Co-managers: | Fifth Third Bancorp, US Bancorp Investments Inc.
|
| Coupon: | 11 5/8%
|
| Price: | 98.265
|
| Yield: | 12%
|
| Spread: | 868 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until April 1, 2014, then callable at 105.813, 102.906, par on and after April 2, 2016
|
| Equity clawback: | 35% at 111.625 until April 1, 2013
|
| Trade date: | April 1
|
| Settlement date: | April 7
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 11½% to 11¾%
|
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