JW Aluminum has postponed its $300 million offering of eight-year secured notes, citing “adverse market conditions.” The decision comes amid the brutal equity sell-off, with the DJIA losing 7.9% yesterday and opening another 2% in the red this morning, before rebounding sharply.
As reported, the company roadshowed the deal all of last week via bookrunners Goldman Sachs (B&D), and Deutsche Bank. Whispers for the debt were in the 8% area, sources said.
According to sources, proceeds were earmarked to refurbish and expand the company’s capabilities at its manufacturing operations. Funds raised would also have been used to repay a $151.4 million secured term loan, as part of a refinancing effort that was expected to include an amendment to the company’s existing asset-based revolving credit facility to extend the maturity of that facility to 2023.
The borrower was also expected to fund the transaction with $35 million of shareholder equity.
S&P Global Ratings assigned a B– rating to the borrower’s proposed bond offering, with a 3 recovery rating. S&P Global analysts “expect adjusted debt to EBITDA of about 6x and adjusted EBITDA margins of about 10% over the next 12 months,” the Jan. 25 report notes.
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