BancAmerica Securities Inc. priced a $100 million high-yield offering for supermarket chain Stater Brothers Holdings Inc. last week.
The offering was BancAmerica Securities' first sole-managed deal since April, when a sour high-yield market caused it to postpone a $150 million offering for Las Vegas-based Station Casinos Inc. The deal, which was fully underwritten by BancAmerica Securities, was followed by the departures of the unit's head of high-yield sales and trading and his deputy.
Stater's 144a senior subordinated notes due in 2004 were priced to yield 9% and were three times oversubscribed, said Jack Brown, Stater's chairman, president, and chief executive officer.
Stater and BancAmerica Securities put on a whirlwind road show that led the team through 10 cities and 22 presentations in just six days.
BankAmerica Corp. even brought in its CEO, David Coulter, and its vice chairman and chief credit officer, Jack Meyers, to work on the deal. The pair met with Stater's executives before the bonds were sold.
"It gave us a comfort to know that the chairman and CEO was lending his support to this effort for a longtime customer," Mr. Brown said.
San Francisco-based BankAmerica traces its relationship with Stater to Security Pacific Corp., which had been dealing with Stater since its founding in the 1930s.
"As we moved through the 1980s and into the present, BankAmerica knew more about our financial history than anyone," Mr. Brown said.
"Now that BankAmerica has developed BancAmerica Securities, I looked at them carefully along with the other" underwriters.
For previous deals, the Colton, Calif.-based supermarket chain had used PaineWebber Inc., Morgan Stanley, Dean Witter, Discover & Co., and Kidder Peabody.
BankAmerica is the fifth-largest lender to the supermarket industry this year, according to Securities Data Co., with $3.7 billion in three issues.
Stater will use $70 million of the deal's proceeds to retire its preferred stock, which is owned by an outside investment group.
The other $30 million will be used for new stores, remodeling, and other corporate needs.
As for the Station Casinos deal, BancAmerica Securities brought the issue to market in May.
The unit recently hired William Ramette, a high-yield trader from NationsBanc Capital Markets, to head high-yield trading. Cable and media specialist Barry Schwartz, a managing director in the high-yield research group, became his deputy.
Jim Baldino, a managing director and head of investment grade crossover bonds, had been interim head of the high-yield group.
