Target Hospitality talks $340 million five-year notes in 9% area; pricing Tuesday

By Paul A. Harris

Portland, Ore., March 11 – Target Hospitality talked its $340 million offering of five-year senior secured notes (B2/B) to yield in the 9% area, according to market sources.

Official talk comes slightly wide of initial guidance in the high 8% area, a trader said.

Books close a 10:30 a.m. ET on Tuesday, and the Rule 144A and Regulation S offering is set to price thereafter.

Credit Suisse Securities (USA) LLC, Barclays, BofA Merrill Lynch and Deutsche Bank Securities Inc. are the joint bookrunners.

The notes come with two years of call protection.

Proceeds, together with funds from other sources, will be used to fund Target Logistics Management, LLC’s (Target Lodging) and RL Signor Holdings LLC’s (Signor Lodging) planned business combination with Platinum Eagle Acquisition Corp., a special purpose acquisition company.

Proceeds will also be used to prepay certain third-party and inter-company debt and provide cash for the combined company’s balance sheet.

The issuing entity will be Arrow BidCo, LLC. Following the business combination, Arrow BidCo will be the direct parent of Target Lodging and Signor Lodging and an indirect, wholly owned subsidiary of Platinum Eagle, which will be renamed Target Hospitality.

Target Hospitality provides specialty rental and hospitality services in the United States, principally focused on several end markets including oil and gas, energy infrastructure and government. It is based in the Woodlands, Texas.

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