kdc/one talks $500 million five-year secured notes to yield 9¾%-10%; books close Wednesday

By Paul A. Harris

Portland, Ore., Aug. 1 – kdc/one Development Corp. Inc. and KDC US Holdings, Inc. talked their $500 million offering of senior secured notes due 2028 (B3/B-/B) to yield 9¾% to 10%, according to market sources.

Official talk comes on top of initial guidance.

Books close at 10 a.m. ET on Wednesday, and the deal is set to price thereafter.

The Rule 144A and Regulation S for life five-year notes have a first call in two years at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

The notes also feature a 40% equity clawback at par plus the full coupon during the non-call period.

UBS is the left bookrunner. Morgan Stanley, BMO, JPMorgan, Goldman Sachs, Deutsche Bank, Citizens, Natixis, RBC and KCM are the joint bookrunners.

The Longueuil, Quebec-based supplier of beauty and personal care products plans to use the proceeds plus a portion of proceeds under its new $991.7 million equivalent term loans and cash on hand to repay outstanding loans under its existing credit agreement, with any remaining proceeds to be used for general corporate purposes.

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