CII Carbon LLC and CII Carbon Corp priced their inaugural bond offering which received an overwhelming response with over 90 investors and a book size of $1.4 billion.
The CII debt is guaranteed by Rain Calcining Limited (RCL) on a limited basis.
The offering, comprised of $235 million of eight-year senior subordinated notes (B3/CCC+/B), priced at par to yield 11.125%, or 25 basis points inside the low end of the 11.5% area price talk, despite a weaker market, and traded at 101 on the break.
The bond represented the first US high yield bond issuance guaranteed by an Indian high yield rated corporate, thereby allowing bond investors to get scarce Indian credit exposure.
The bond proceeds will be used in part to repay the bridge loan, provided by Citigroup,incurred to partially finance the acquisition of CII Carbon by RCL.
Citi has also arranged, on a joint basis, the $395 million senior secured loan transaction that was funded on July 19, 2007 in conjunction with this acquisition.
A comprehensive global roadshow was conducted covering high yield and emerging market investors in Asia, Europe and the US to include Singapore, Hong Kong, London,San Francisco, Los Angeles, New York, New Jersey and Boston.
The transaction The bond achieved the issuer’s objectives of accessing institutional investors with over 90% subscription by asset managers. US markets, with around 73% participation, provided theprice leadership with Europe and Asia taking up 17% and 10% respectively.
CII is based in Texas and is the second largest producer of calcined petroleum coke (CPC) in the world. RCL, based in India, is the largest CPC producer in Asia.
In July, RCL acquired the entity which owned all the outstanding equity interests of CII through its subsidiary Rain/CII Holdings, Inc., creating the world’s leading producer of CPC with approximately 13% of global production capacity.