New Issue: Core & Main sells $250 million tap of 6 1/8% notes due 2025 at 98.76 to yield 6.407%

By Paul A. Harris

Portland, Ore., June 3 – Core & Main LP priced a $250 million add-on to the CD&R Waterworks Merger Sub, LLC (HD Supply Waterworks, Ltd.) 6 1/8% senior notes due Aug. 15, 2025 (Caa2/existing CCC+) at 98.76 to yield 6.407% in a Wednesday drive-by, according to market sources.

Bookrunners were BofA Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., RBC Capital Markets LLC, Goldman Sachs & Co. LLC, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc., Credit Suisse Securities (USA) LLC, Natixis Securities Americas LLC and Nomura Securities International Inc.

The issue price came on top of price talk.

The add-on notes will become fungible with the existing notes. The fungibility was added after the deal was announced to the market, earlier Wednesday, as a non-fungible add-on.

The St. Louis-based distributor of water, sewer, storm and fire protection products plans to use the proceeds to pay off its senior ABL credit facility and for general business purposes.

In August 2017 Clayton, Dubilier & Rice acquired the Waterworks division of HD Supply in a transaction valued at $2.5 billion, following which the name changed to Core & Main.

Issuer:	Core & Main LP
Amount:	$250 million
Maturity:	Aug. 15, 2025
Security description:	Add-on to CD&R Waterworks Merger Sub, LLC (HD Supply Waterworks, Ltd.) 6 1/8% senior notes due Aug. 15, 2025
Bookrunners:	BofA Securities Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Barclays, Deutsche Bank Securities Inc., RBC Capital Markets LLC, Goldman Sachs & Co. LLC, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc., Credit Suisse Securities (USA) LLC, Natixis Securities Americas LLC and Nomura Securities International Inc.
Coupon:	6 1/8%
Price:	98.76
Yield:	6.407%
Spread:	600 bps
First call:	Aug. 15, 2020 at 103.063
Trade date:	June 1
Settlement date:	June 5
Ratings:	Moody's: Caa2
	S&P: existing CCC+
Distribution:	Rule 144A and Regulation S for life
Price talk:	98.76
Marketing:	Drive-by
Original issue:	$500 million priced in July 2017
Fungibility:	Add-on notes will become fungible with existing notes (deal was announced as a non-fungible earlier Thursday)

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