Contact:
Mitchell Singer
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October 28, 1998
First Union Closes $45 Million Private Placement for Major Florida-based Chemical Manufacturer
Long-standing First Union-Florida Customer
CHARLOTTE-First Union Capital Markets recently completed a $45 million private placement of senior secured notes for Huron Tech Corp, the largest sodium chlorate producer in the southeastern United States and the fourth largest in North America. The net proceeds from the financing-structured as eight-year notes with an average life of six years-will be used in part to refinance high coupon subordinated debt and to provide longer-term financing for a new facility currently under construction in Eastover, S.C.
First Union Capital Markets acted as exclusive agent on the private placement transaction and provided additional traditional commercial banking services. The combined effort demonstrated First Union's ability to provide one-stop banking through coordination between its commercial banking-in this case First Union's Jacksonville, Fla. office-and capital markets divisions.
"The long-term banking relationship between First Union and Huron Tech combined with the teamwork between the commercial banking group and the investment banking group made for a successful partnership," said. Peter Barry, First Union Capital Markets investment banking managing director "Working together we were able to structure the deal and make it financially attractive for Huron while at the same time appealing to institutional investors."
Huron Tech is engaged in the process development, design, manufacture and operation of processing plants that produce sodium chlorate and other chemicals used primarily by paper and pulp mills to bleach paper pulp. Warren Bailey, president and CEO of Huron, said that the company's banking relationship with First Union, dating back to 1992, was instrumental in selecting Capital Markets to handle all facets of the transaction.
"First Union was very helpful in directing us through the compilation of a private placement process and, judging by the investor response, they seemed to know exactly what the institutional investment community wanted," said Bailey. "They also were flexible enough to adapt the financing to changing market conditions which required considerable additional time and effort. They did an excellent job."
Private placements are often used by corporations to raise fixed-rate capital with longer dated maturities than traditional bank financing. They are usually sold to qualified institutional buyers including life insurance companies, pension funds and other special purpose investment funds.
Private placements are popular with middle market companies-those with sales between $25 million and $500 million-which are frequently too small for the public markets but maintain strong credit characteristics and solid growth prospects.
Capital Markets continues to demonstrate considerable growth in its private placement business. Through June 1998, First Union's Private Finance Group ranked in the top ten in traditional private placement financings among all commercial and investment banks (ranked by number of transactions).
First Union Capital Markets is a division of Wheat First Securities, Inc., a separate, broker-dealer, non-bank subsidiary of First Union Corp. (NYSE: FTU) and an affiliate of First Union National Bank. Wheat First Securities, Inc., a member of the New York Stock Exchange, Inc., NASD and the Securities Investor Protection Corp., provides a full range of investment banking products and services including asset-backed finance, public finance, syndicated loans, private finance, equity underwriting and investment grade and high-yield debt finance. First Union also offers M&A advisory services through its M&A subsidiary, Bowles Hollowell Conner & Co.
First Union Corporation (NYSE:FTU) is a leading provider of financial services to more than 16 million retail and corporate customers throughout the East Coast and the nation. First Union is the nation's sixth largest bank holding company, based on assets of $234.6 billion as of September 30, 1998, and ranks among the top 15 financial services companies in the world, based on market capitalization. The company operates full service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C.
The notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements. All of the notes have been sold and this release does not constitute an offer to sell or the solicitation of any offer to buy any of the notes.
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