Western Refining's $600 million note offering talked at 12½%-12¾% yield, about 8 points OID

By Paul A. Harris

St. Louis, June 4 - Western Refining, Inc. set price talk for its $600 million offering of eight-year senior secured notes (B3/BB-) at 12½% to 12¾% with about 8 points of original issue discount, an informed source said Thursday.

The order books are scheduled to close at 11 a.m. ET on Friday.

Banc of America Securities LLC, Goldman Sachs & Co., RBS Securities Inc. and Wachovia Securities LLC are joint bookrunners for the Rule 144A offering.

BBVA Securities Inc., BNP Paribas Securities Corp., Capital One Southcoast, Comerica Investments and Natixis Bleichroeder are co-managers.

The notes come with four years of call protection.

Proceeds will be used to repay the El Paso, Texas-based refiner's term loan.

The notes are secured by a first-priority lien on the collateral securing the term loan and a second-priority lien on the collateral securing the revolving credit facility.

Credit ratings remain to be determined.

Western Refining also plans to sell $100 million of five-year convertible notes after the market close on Thursday and to sell 14 million shares of common stock, syndicate sources in the convertibles market said Monday. Merrill Lynch & Co. and Goldman Sachs are acting as joint bookrunners for the convertibles and stock offerings.

In addition to refining crude, the prospective issuer operates service stations and convenience stores.

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