By Paul A. Harris
St. Louis, May 21 - Gibson Energy ULC and GEP Midstream Finance Corp. priced an upsized $560 million issue of 11¾% five-year first-lien senior secured notes (B1/BB-/) at 97.2706 to yield 12½% on Thursday, according to an informed source.
The yield came at the wide end of the 12¼% and 12½% yield talk. The issue price was in line with the 2 to 3 points of original issue discount price talk.
UBS Investment Bank is left bookrunner for the Rule 144A and Regulation S with registration rights deal, which was upsized from $545 million. RBC Capital Markets Corp. and RBS Securities Inc. are joint bookrunners.
Proceeds will be used to repay the bridge loans, the proceeds from which were used, along with the equity contributions from R/C Fund IV, to finance an acquisition, to repay debt and to pay related fees and expenses. Affiliates of the initial purchasers are lenders of the bridge loans and will receive a substantial portion of the net proceeds from the notes offering.
The issuer is a Calgary, Alta.-based midstream energy company.
| Issuer: | Gibson Energy ULC and GEP Midstream Finance Corp.
|
| Face amount: | $560 million, increased from $545 million
|
| Proceeds: | $544.716 million (approximate)
|
| Maturity: | May 27, 2014
|
| Security description: | First-lien senior secured notes
|
| Bookrunners: | UBS Investment Bank (left books), RBC Capital Markets Corp., RBS Securities Inc.
|
| Coupon: | 11¾%
|
| Price: | 97.2706
|
| Yield: | 12½%
|
| Spread: | 1,036 bps
|
| Call features: | Callable on May 27, 2012 at 105.875, par on and after May 27, 2013
|
| Equity clawback: | 35% at 111.75 until May 27, 2012
|
| Trade date: | May 21
|
| Settlement date: | May 27
|
| Ratings: | Moody's: B1
|
| Standard & Poor's: BB-
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Price talk: | 12¼% to 12½% yield with original issue discount of 2 to 3 points
|
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