Drax sets initial talk in £500 million two-part five-year secured notes offering; pricing Friday

By Paul A. Harris

Portland, Ore., April 20 – Drax Group Co. set price talk in its £500 million two-part offering of five-year senior secured notes (BB+/BB+), according to a market source.

A £275 million minimum amount of fixed-rate notes with two years of call protection is talked to yield 4¼% to 4½%.

A to-be-determined amount of floating-rate notes with one year of call protection is talked at Libor plus 400 basis points to 425 bps.

The deal is set to price on Friday.

Joint bookrunner Barclays will bill and deliver for the Rule 144A and Regulation S for life offering. J.P. Morgan Securities is also a joint bookrunner. BofA Merrill Lynch and Lloyds are co-managers.

The Selby, England-based coal and biomass generator plans to use the proceeds to repay its bridge facility and refinance existing term debt.

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