Kemet to sell $225 million eight-year notes to repay bank debt, fund tender for convertibles

By Paul A. Harris

St. Louis, April 20 - Kemet Corp. will return to the new-issue market with a $225 million offering of eight-year senior notes (expected ratings B2/B) that is expected to price on Wednesday or Thursday, according to an informed source.

Bank of America Merrill Lynch will run the books. KeyBanc Capital Markets Inc. and UBS Investment Bank are the co-managers.

Proceeds will be used to repay substantially all outstanding debt under the company's existing credit facilities and to fund a tender for a portion of its 2¼% convertibles due 2026.

The Rule 144A with registration rights notes come with four years of call protection and have a 101% poison put.

The Greenville, S.C.-based manufacturer of capacitors postponed a $275 million offering of eight-year senior notes on Feb. 11, 2010 due to unfavorable market conditions.

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