By Paul A. Harris
Portland, Ore., Jan. 23 – KeHE Distributors, LLC priced a $750 million issue of five-year senior secured notes (B3/B) at par to yield 9% on Tuesday, according to market sources.
The yield printed in the middle of yield talk in the 9% area. Initial guidance was in the low-9% area.
The deal was playing to $1 billion of demand, according to a bond trader, who added that the new KeHE 9% notes due 2029 broke above 101 before settling to par ˝ bid, par 7/8 offered late Tuesday afternoon.
The notes were sold via issuers KeHE Distributors, KeHE Finance Corp. and NextWave Distribution, Inc.
BMO Capital Markets Corp. was the left bookrunner. Joint bookrunners were 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.
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.
| Issuers: | KeHE Distributors, LLC, KeHE Finance Corp. and NextWave Distribution, Inc.
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| Amount: | $750 million
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| Issue: | Senior secured notes
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| Maturity: | Feb. 15, 2029
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| Left bookrunner: | BMO Capital Markets Corp.
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| Joint bookrunners: | 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
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| Coupon: | 9%
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| Price: | Par
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| Yield: | 9%
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| Spread: | 493 bps
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| First call: | Feb. 15, 2026 at 104.5
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| Trade date: | Jan. 23
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| Settlement date: | Feb. 6
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| Ratings: | Moody’s: B3
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| S&P: B
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 9% area
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| Marketing: | Roadshow
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