Published on 11/20/2009 in the Prospect News High Yield Daily.
New Issue: Cloud Peak Energy prices $600 million eight-, 10-year senior notes
By Paul A. Harris
St. Louis, Nov. 20 - Cloud Peak Energy Resources LLC and Cloud Peak Energy Finance Corp. priced a restructured $600 million two-part offering of senior notes (B1/BB-/) on Friday, according to an informed source.
A restructured $300 million tranche of 8¼% eight-year notes priced at 99.268 to yield 8 3/8%. The yield printed in the middle of the 8¼% to 8½% yield talk. The reoffer price was slightly rich to the approximately 1 point of discount talk.
The tranche was restructured, with respect to its tenor, which was increased by one year. Previously it had been marketed as a tranche of seven-year notes.
Meanwhile the company priced a $300 million tranche of 8½% 10-year notes at 99.160 to yield 8 5/8%.
Once again the yield printed in the middle of the 8½% to 8¾% yield talk. The issue price came in line with discount talk of approximately 1 point.
Morgan Stanley & Co., Credit Suisse Securities and RBC Capital Markets Corp. were joint bookrunners.
Proceeds will be used to pay a distribution to Rio Tinto Energy America Inc., for general corporate purposes, including cash reserves for securing reclamation obligations, and for capital expenditures.
Cloud Peak is a Gillette, Wyo.-based coal company.
| Issuers: | Cloud Peak Energy Resources LLC and Cloud Peak Energy Finance Corp.
|
| Face amount: | $600 million
|
| Proceeds: | $595,284,000
|
| Securities: | Senior notes
|
| Bookrunners: | Morgan Stanley & Co. Inc., Credit Suisse Securities (USA) LLC, RBC Capital Markets Corp.
|
| Senior co-managers: | Calyon Securities (USA) Inc., J.P. Morgan Securities Inc., Scotia Capital (USA) Inc., SG Americas Securities, LLC, Wells Fargo Securities, LLC
|
| Co-managers: | BMO Capital Markets Corp., Citigroup Global Markets Inc., ING Financial Markets LLC, Natixis Bleichroeder LLC, PNC Capital Markets LLC, Raymond James & Associates, Inc., SunTrust Robinson Humphrey, Inc., Capital One Southcoast, Inc.
|
| Trade date: | Nov. 20
|
| Settlement date: | Nov. 25
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
|
|
| Eight-year notes
|
| Amount: | $300 million
|
| Maturity: | Dec. 15, 2017 (maturity increased by one year, from 2016)
|
| Coupon: | 8¼%
|
| Price: | 99.268
|
| Yield: | 8 3/8%
|
| Spread: | 530.5 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Dec. 15, 2013, then callable at 104.125, 102.063, par on and after Dec. 15, 2015
|
| Equity clawback: | 35% at 108.25 until Dec. 15, 2012
|
| Price talk: | 8¼% to 8½% with about 1 point OID
|
|
|
| 10-year notes
|
| Amount: | $300 million
|
| Maturity: | Dec. 15, 2019
|
| Coupon: | 8½%
|
| Price: | 99.160
|
| Yield: | 8 5/8%
|
| Spread: | 528.5 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Dec. 15, 2014, then callable at 104.25, 102.833, 101.417, par on and after Dec. 15, 2017
|
| Equity clawback: | 35% at 108.50 until Dec. 15, 2012
|
| Price talk: | 8½% to 8¾% with about 1 point OID
|
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