20 Jan, 2021

Watco Cos. add-on 6.5% senior notes due 2027 price at 106.75; terms

Watco Companies LLC has placed a $100 million add-on to its existing 6.5% senior notes due 2027 at the midpoint of price guidance, sources said. Bookrunners for the deal were J.P. Morgan, BMO Capital Markets, Citigroup, Truist, U.S. Bancorp and Wells Fargo.

The company will use net proceeds from the add-on to repay borrowings under its revolving credit facility and for general corporate purposes. The initial $500 million of the bonds were placed in June 2020, with pricing at par.

Watco provides transportation, terminal and port, supply chain, and mechanical solutions for customers in North America and Australia. Terms:

Issuer Watco Companies LLC and Watco Finance Corp.
Ratings B-/Caa1
Amount $100 million (add-on)
Issue Senior notes (144A/Reg S for life)
Coupon 6.50%
Price 106.75
Yield 5.243% (yield to maturity)
Spread T+458
Maturity June 15, 2027
Call First call on June 15, 2023, at par +50% coupon
Trade Jan. 20, 2021
Settle Jan. 22, 2021 (T+2)
Joint bookrunners JPM/BMO/C/STRH/USB/WF
Price talk 106.5-107
Notes Add-on increases full amount of notes issued to $600 million; make-whole at T+50; change of control at 101