El Paso, Checkers Price HY Deals
November 1, 2012
Checkers and El Paso issued a combined $635 million in high yield bonds.
El Paso Corp. priced $475 million in 4.7% senior notes due 2042. Such long-term bonds are rare on the high yield market, but El Paso is a split-rated company, with some of its entities and securities holding investment-grade ratings. The Houston-based oil and natural gas company sold the bonds through its El Paso Pipeline Partners subsidiary. It plans to use the proceeds to repay its $470 million in outstanding revolver debt and for general corporate purposes. Bank of America Merrill Lynch, RBC, RBS, DNB Markets and Scotiabank were the bookrunners. Moody’s Investors Service rated the bonds Ba1 and Standard & Poor’s rated them BBB- Parent company El Paso Corp. is within the speculative-grade ratings of both agencies, with a Ba2 rating from Moody’s and a BB rating from S&P. This past April, the company issued $2 billion in 9.375% senior notes due 2020 and $750 million in 6.875% senior secured notes due 2019 to help finance its $21.1 billion merger with Kinder Morgan. As of Sept. 30, El Paso Pipeline had $4.3 billion in long-term debt, according to a regulatory filing.
Fast food restaurant operator Checkers Drive In Restaurant sold $160 million (upsized from $150 million) in 11%senior secured notes due 2018. Jefferies was the lead bookrunner. The Tampa, Fla.-based company started in Mobile, Ala. in 1986 and merged with Kentucky-based Rally’s fast food restaurant company in 1999. The combined company has more than 800 restaurants in the United States. The company was bought by private equity firm Wellspring Capital Management for $188 million in 2006. Wellspring reportedly put the company up for sale this past August. It is still listed as a portfolio company on Wellspring's web site.