By Paul A. Harris
Portland, Ore., March 18 – SPX Flow, Inc. priced a downsized $500 million issue of 8¾% eight-year senior notes (Caa2/CCC+) at 95.183 to yield 9 5/8% on Friday, according to market sources.
The issue size decreased from $500 million.
The downsized deal launched rich to price talk earlier Friday afternoon.
The execution saw the coupon launching on top of coupon talk, the price coming at the rich end of the 93.865 to 95.183 launch price talk and the yield printing at the tight end of the 9 5/8% to 9 7/8% launch yield talk.
Official price talk, which surfaced earlier Friday, specified an 8¾% coupon with a discount of 91.933 to 93.216 and a yield of 10% to 10¼%.
The deal underwent covenant changes which primarily bear upon how the company may disburse cash and incur additional debt.
A partially syndicated $570 million bridge loan backing the bonds was capped at 8¾%, leaving the dealer and the bridge participants on the hook to cover the discount, sources say.
BofA Securities Inc. was the left bookrunner. Joint bookrunners were Citigroup Global Markets Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., RBC Capital Markets LLC, Truist Securities Inc. and UBS Securities LLC.
The $70 million amount by which the notes issue downsized was shifted to the concurrent term loan.
Proceeds plus cash on hand, a senior secured credit facility and an equity contribution will be used to support Lone Star Funds’ acquisition of SPX Flow Inc. and refinance existing credit facilities.
The issuing entity is Redwood Star Merger Sub, Inc., which is to be merged with and into SPX Flow.
Charlotte, N.C.-based SPX Flow supplies highly engineered products and technologies for the HVAC and detection and measurement markets.
| Issuer: | Redwood Star Merger Sub, Inc. to merge with and into SPX Flow, Inc.
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| Amount: | $500 million, decreased from $570 million
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| Issue: | Senior notes
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| Maturity: | April 4, 2030
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| Left bookrunner: | BofA Securities Inc.
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| Joint bookrunners: | Citigroup Global Markets Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc., RBC Capital Markets LLC, Truist Securities Inc. and UBS Securities LLC
|
| Coupon: | 8¾%
|
| Price: | 95.183
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| Yield: | 9 5/8%
|
| Spread: | 748 bps
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| Call protection: | Three years
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| Trade date: | March 18
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| Settlement date: | April 5
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| Ratings: | Moody's: Caa2
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| S&P: CCC+
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| Distribution: | Rule 144A and Regulation S
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| Price talk: | 8¾% coupon at 91.933 to 93.216 to yield 10% to 10¼%
|
| Marketing: | Roadshow
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