Texas Industries to tap 7¼% notes due July 2013 via Banc of America

By Paul A. Harris

St. Louis, Aug. 6 - Texas Industries, Inc. plans to tap its 7¼% senior notes due July 15, 2013 (existing ratings Ba3/BB-/) in a nonfungible add-on deal, according to a buyside source who spoke Wednesday on background.

The source said that the size of the deal remains to be determined, pending demand, but added that the size is expected to be modest.

Pricing is expected Thursday.

Banc of America Securities LLC is leading.

The buysider spotted the existing Texas Industries 7¼% notes due 2013 at 98½ bid and said that the add-on notes are expected to come around 93.50 to yield approximately 9%.

Asked to comment on the five-dollar discount to the trading price of the outstanding notes, the buysider said that the Dallas-based cement construction materials company operates in an economically sensitive, construction-related sector, and is pressured by rising energy prices.

The source, who is looking at the deal, added that presently high-yield bonds, in order to clear the market, need to be priced to sell.

The buysider expects the company to use the proceeds of the tap for general corporate purposes - possibly to term out bank debt.

The original $250 million issue priced at par in June 2005.

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