New Issue: KeHE prices $200 million secured notes at par to yield 7 5/8%

By Paul A. Harris

Portland, Ore., July 30 - KeHE Distributors, LLC and KeHE Finance Corp. priced a $200 million issue of eight-year senior secured second-lien notes (B3/B) at par to yield 7 5/8% on Tuesday, according to a syndicate source.

The yield printed at the tight end of yield talk that was set in the 7¾% area.

BMO Capital Markets Corp. was the left bookrunner. J.P. Morgan Securities LLC was the joint bookrunner.

The Romeoville, Ill.-based specialty, natural and organic, and fresh food distribution company plans to use the proceeds to refinance debt, to redeem some preferred stock and for general corporate purposes.

Issuer:	KeHE Distributors, LLC and KeHE Finance Corp.
Amount:	$200 million
Maturity:	Aug. 15, 2021
Securities:	Senior secured second-lien notes
Left bookrunner:	BMO Capital Markets
Joint bookrunner:	J.P. Morgan Securities LLC
Co-managers:	Wells Fargo, Moelis, US Bancorp, RBS
Coupon:	7 5/8%
Price:	Par
Yield:	7 5/8%
Spread:	536 bps
First call:	Make-whole call at Treasuries plus 50 bps until Aug. 15, 2017, then callable at 103.813
Special call:	Issuer may redeem 10% of the notes annually at 103 during the non-call period
Equity clawback:	35% at 107.625 until Aug. 15, 2016
Investor put:	101% upon change of control
Trade date:	July 30
Settlement date:	Aug. 6
Ratings:	Moody's: B3
	Standard & Poor's: B
Distribution:	Rule 144A and Regulation S for life
Price talk:	7¾% area
Marketing:	Roadshow

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