By Paul A. Harris
Portland, Ore., Oct. 7 – Oregon Tool Inc. priced a downsized $300 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 7 7/8% on Thursday, according to market sources.
The issue size was decreased from $350 million with the shift of $50 million of proceeds to a concurrent bank loan.
The yield printed at the tight end of yield talk in the 8% area but well wide of initial guidance in the high 6% area.
Orders lagged at the 6% initial guidance, a trader said, adding that the company was able to attract interest among investors that amounted to around $100 million, well below deal size.
At 8%, books built to $500 million, the trader added.
J.P. Morgan Securities LLC was the lead.
The notes were sold via issuer OT Merger Corp.
Proceeds plus a term loan and sponsor equity will be used to fund Platinum Equity's acquisition of the Portland Ore.-based cutting tool manufacturer from American Securities and P2 Capital Partners.
Prior to changing its name earlier this year, the company was known as Blount International.
| Issuer: | OT Merger Corp. (Oregon Tool Inc.)
|
| Amount: | $300 million, decreased from $350 million
|
| Maturity: | Oct. 15, 2029
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| Securities: | Senior notes
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| Lead: | J.P. Morgan Securities LLC
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| Coupon: | 7 7/8%
|
| Price: | Par
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| Yield: | 7 7/8%
|
| Spread: | 646 bps
|
| Call protection: | Three years
|
| Trade date: | Oct. 7
|
| Ratings: | Moody's: Caa1
|
| S&P: CCC+
|
| Price talk: | 8% area
|
| Marketing: | Roadshow
|
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