By Paul A. Harris
Portland, Ore., May 17 – SRS Distribution, Inc. priced a downsized $350 million issue of 8¼% eight-year senior notes (Caa2/CCC+) at par to yield 8.246% on Thursday, according to market sources.
The issue size was decreased from $380 million, with $30 million shifted to the term loan, increasing the loan size to $1.33 billion from $1.3 billion.
The yield printed near the wide end of the 8% to 8¼% yield talk and well wide of the 7¾% to 8% initial guidance, according to a trader.
There were covenant changes bearing upon how the company may disburse cash and incur additional debt.
Barclays was the lead left bookrunner. BofA Merrill Lynch, UBS Investment Bank, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Nomura and RBC Capital Markets LLC were the joint bookrunners.
Proceeds will be used to fund the buyout of the McKinney, Texas-based roofing products distributor by Leonard Green & Partners LP from Berkshire Partners.
| Issuer: | SRS Distribution, Inc.
|
| Amount: | $350 million, decreased from $380 million
|
| Maturity: | July 1, 2026
|
| Securities: | Senior notes
|
| Left bookrunner: | Barclays
|
| Joint bookrunners: | BofA Merrill Lynch, UBS Securities LLC, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., Nomura, RBC Capital Markets LLC
|
| Coupon: | 8¼%
|
| Price: | Par
|
| Yield: | 8.246%
|
| Spread: | 514 bps
|
| First call: | July 1, 2021 at 104.125
|
| Equity clawback: | 40% at 108.25 until July 1, 2021
|
| Trade date: | May 17
|
| Settlement date: | May 23
|
| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8% to 8¼%
|
| Marketing: | Roadshow
|
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