KeHE Distributors talks $750 million five-year secured notes in 9% area; pricing Tuesday

By Paul A. Harris

Portland, Ore., Jan. 22 – KeHE Distributors, LLC talked its $750 million offering of senior secured notes due 2029 (B3/B) to yield in the 9% area, according to market sources.

Official talk comes tight to initial guidance in the low-9% area.

Books close at 10 a.m. ET on Tuesday, and the Rule 144A for life offering is set to price thereafter.

The five-year notes become subject to an initial call in two years at par plus 50% of the coupon.

BMO Capital Markets Corp. is the left bookrunner. BofA Securities Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Rabo Securities USA Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the joint bookrunners.

The Naperville, Ill.-based specialty food distributor plans to use the proceeds to fully redeem its 8 5/8% senior secured second-lien notes due 2026, to repay a portion of its ABL balance, to purchase all class A preferred equity held by TowerBrook and a portion of the class B common equity held by TowerBrook and to pay a related cumulative capital true up contribution.

The co-issuers are KeHE Finance Corp. and NextWave Distribution, Inc.

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