Advanced Drainage talks $350 million eight-year notes at 5%-5¼%

By Paul A. Harris

Portland, Ore., Sept. 18 – Advanced Drainage Systems, Inc. talked its $350 million offering of eight-year senior notes (B1/B) to yield 5% to 5¼%, according to a syndicate source.

Books close at 2:30 p.m. ET on Wednesday, and the notes are set to price thereafter.

Morgan Stanley & Co. LLC, Barclays, BofA Securities Inc., PNC Capital Markets LLC, BMO Capital Markets Corp., Fifth Third Securities, Inc. and HSBC Securities (USA) Inc. are the joint bookrunners.

The Rule 144A for life and Regulation S notes become callable after three years at par plus 50% of the coupon.

Advanced Drainage plans to sell the notes as part of a funding package that includes a $700 million first-lien term loan and a $350 million five-year revolving credit facility.

Proceeds will be used, together with proceeds from $1.05 billion of credit facilities and a recent equity offering, to repay a portion of the outstanding debt under the company’s existing senior secured credit facility that was incurred to fund its $1.08 billion acquisition of Infiltrator Water Technologies Ultimate Holdings, Inc.

Advanced Drainage Systems is a Hilliard, Ohio-based manufacturer of plastic corrugated pipes and other drainage products.

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