New Issue: SRA prices $400 million senior notes due 2019 at par to yield 11%

By Paul A. Harris

Portland, Ore., July 15 - SRA International, Inc. priced a $400 million issue of senior notes due Oct. 1, 2019 (Caa1/CCC+/) at par to yield 11% on Friday, according to an informed source.

The yield printed on top of price talk.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and Goldman Sachs & Co. were the joint bookrunners.

Credit Suisse Securities (USA) LLC is the co-manager.

The issuing entity will be Sterling Merger Inc., which will be merged into SRA, a Fairfax, Va.-based technology and consulting services company.

Proceeds, along with proceeds from a new senior secured credit facility, will be used to help fund the buyout of SRA by Providence Equity Partners for $31.25 in cash per share of common stock for a total value of $1.88 billion.

Issuer:	Sterling Merger Inc., to be merged into SRA International, Inc.
Amount:	$400 million
Maturity:	Oct. 1, 2019
Securities:	Senior notes
Bookrunners:	Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co.
Co-manager:	Credit Suisse Securities (USA) LLC
Coupon:	11%
Price:	Par
Yield:	11%
Spread:	853 bps
Call features:	Make-whole call at Treasuries plus 50 bps until Oct. 1, 2015, then callable at 105.5, 102.75, par on and after Oct. 1, 2017
Equity clawback:	35% at 111.0 until Oct. 1, 2014
Change-of-control put:	101%
Trade date:	July 15
Settlement date:	July 20
Ratings:	Moody's: Caa1
	Standard & Poor's: CCC+
Distribution:	Rule 144A and Regulation S with registration rights
Price talk:	11% area
Marketing:	Roadshow

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