Drax talks $300 million 7.5-year secured notes to yield in 6¾% area; pricing Thursday

By Paul A. Harris

Portland, Ore., April 11 – Drax Group Co. talked its $300 million offering of senior secured notes due November 2025 (BB+//BB+) to yield in the 6¾% area, according to a market source.

Books close at 10 a.m. ET on Thursday, and the Rule 144A and Regulation S for life offering is set to price thereafter.

Global coordinator Barclays will bill and deliver. BofA Merrill Lynch is also a global coordinator. Deutsche Bank Securities Inc. is a joint bookrunner.

The notes, which will be issued through Drax Finco plc, become callable after three years at par plus 50% of the coupon and feature a 50% equity clawback at par plus the coupon.

The Selby, England-based coal and biomass generator plans to use the proceeds to pay off its senior secured floating-rate notes due 2022 on or after May 1, 2018 and for cash overfunding.

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