Unifrax launches $1.2 billion two-part notes tight to talk, tweaks tranche sizes; pricing Wednesday

By Paul A. Harris

Portland, Ore., Sept. 15 – ASP Unifrax Holdings, Inc. launched $1.2 billion of high-yield notes in two resized tranches, according to a market source.

An upsized $800 million tranche of seven-year senior secured notes (B2/BB) launched at 5¼%, at the tight end of official talk in the 5½% area (initial talk was in the high 5% area). The tranche size increased from $700 million, as $100 million was shifted from the unsecured tranche.

The downsized $400 million tranche of eight-year senior unsecured notes (Caa2/CCC+) launched at 7½%, tight to official talk in the 7¾% area (initial guidance was in the 8% area). The tranche size decreased from $500 million.

The Rule 144A and Regulation S deal is expected to price later on Wednesday.

J.P. Morgan Securities LLC is leading the notes offering.

The notes in both tranches come with three years of call protection.

The Buffalo, N.Y.-based specialty metals company is bringing the deal in conjunction with its announced plans to acquire Lydall, Inc.

Proceeds plus an equity contribution from sponsor Clearlake Capital Group, LP and cash on the balance sheet will be used to help fund the merger with Lydall, to repay Lydall's existing $261 million of debt and its $250 million second-lien term loan, to add cash to the balance sheet, for working capital and for other general corporate purposes.

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