Quality Distribution to offer floating rate notes
Jan 20, 2005 11:30 AM
Quality Distribution LLC, the wholly-owned subsidiary of Quality Distribution Inc, Tampa FL, and its wholly-owned subsidiary, QD Capital Corp, plans to offer, through a private placement, senior floating rate notes due 2012, subject to market and other conditions, according to company information.
Quality Distribution LLC and QD Capital Corporation intend to use the gross proceeds of the offering, which are expected to be approximately $85 million, to prepay approximately $70 million of term loan indebtedness outstanding under their credit agreement; to make a distribution to their parent, Quality Distribution Inc, to be used to redeem all $7.5 million principal amount of Quality Distribution, Inc's Series B Floating Interest Rate Subordinated Term Securities due 2006; and for general corporate purposes.
The proposed offering of the notes is conditioned upon receipt of an amendment of the credit agreement. The amendment will, among other things, permit the issuance of the notes and the application of the proceeds there from.
In addition, upon completion of offering of the notes, the amendment will eliminate the consolidated interest coverage covenant and the consolidated total leverage covenant, and replace them with a consolidated senior secured leverage covenant.
The notes will be offered within the United States only to qualified institutional buyers pursuant to rule 144A under the Securities Act of 1933, as amended, and outside the United States, only to non-US investors in reliance on Regulation S.
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