KeHE Distributors talks $200 million second-lien notes due 2026 at mid-to-high 8% area

By Cristal Cody

Tupelo, Miss., Sept. 10 – KeHE Distributors LLC is marketing a $200 million offering of senior secured second-lien notes due 2026 (B3/B-) that is initially talked to price in the mid to high 8% yield area, a source said.

The notes are expected to price on Wednesday.

BMO Capital Markets Corp. is the bookrunner of the Rule 144A and Regulation S transaction.

The notes will be guaranteed by certain KeHE subsidiaries and secured by a second priority lien on KeHE’s assets securing debt under its asset-based revolving credit facility.

Proceeds will be used to fund the redemption and discharge of all $200 million outstanding of the company’s 7 5/8% senior secured second-lien notes due 2021.

KeHE Distributors is a Naperville, Ill.-based employee-owned company that provides natural, organic, specialty, ethnic and fresh food products to grocery and natural food stores and other retailers in North America.

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