DS Waters downsizes to $300 million, talks restructured eight-year notes to yield 10%-10½%

By Paul A. Harris

Portland, Ore., Aug. 14 - DS Waters of America Inc. downsized its offering of eight-year second-priority senior secured notes (/B-/) to $300 million from $350 million, shifting $50 million of proceeds to its concurrent bank loan, according to a syndicate source.

The notes are talked to yield 10% to 10½%.

The deal was restructured, with call protection extended: the notes become callable in four years at par plus 50% of the coupon, whereas previously they had been callable in three years at par plus 75% of the coupon.

There have also been covenant changes. The secured debt cap was decreased to 3 times to 1 from 3.5 times to 1. Also a second-lien secured debt cap of 5 times to 1 was added.

Books close at 10 a.m. ET on Thursday, and the deal is set to price thereafter.

Credit Suisse Securities (USA) LLC, Barclays, Jefferies & Co. and BMO Capital Markets Corp. are the joint bookrunners for the Rule 144A with registration rights deal.

The notes will feature an equity clawback of up to 35% for the first three years and a change-of-control put at 101%.

DS Waters is an Atlanta-based direct-to-consumer beverage services provider.

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