RailWorks sets call to pitch $325M of secured 2nd-lien notes for buyout

RailWorks Corp. has been added to the new-issue calendar with a $325 million offering of seven-year (non-call three) senior secured second-lien notes. An investor call is scheduled for today at 11 a.m. ET via joint bookrunners J.P. Morgan and BMO Capital Markets, according to sources. Initial price thoughts are tipped in the mid- to high 8% context.

Pricing for the bonds is expected Nov. 4.

The deal supports Bernhard Capital Partners Management LP's agreement to acquire the company from Wind Point Advisors LLC. The transaction is expected to close in the fourth quarter of 2021.

RailWorks engages in the building and maintenance of rail transportation infrastructure in the United States and Canada. RailWorks Holdings LP and RailWorks Rally Inc. are the issuing entities for the debt. The notes will be structured to include a special redemption allowing for the issuers to redeem up to 10% of the bonds per annum at 103% during a set timeframe, sources said.

Currently, there are no bonds in RailWork’s capital structure. The company’s existing debt includes a $230 million term loan B ( L+550, 1% Libor floor) placed in December 2020 to fund a tuck-in acquisition and a shareholder distribution.