By Paul A. Harris
St. Louis, Nov. 5 - K&F Acquisition Inc. priced $315 million of 10-year senior subordinated notes (Caa1/B-) at par to yield 7¾% on Friday, according to a syndicate source.
Price talk was 7¾% to 8%.
The issue was downsized by $50 million. That amount was added onto the company's term loan.
Lehman Brothers and Goldman Sachs & Co. ran the books for the Rule 144A/Regulation S issue. The co-managers were Citigroup and JP Morgan.
Proceeds will be used to fund Aurora Capital Group's acquisition of K&F from Bernard Schwartz and Lehman Bros. Merchant Banking for $1.06 billion in cash, which includes the tender for the company's $185 million of 9¼% senior subordinated notes due 2007 and $250 million of 9 5/8% senior subordinated notes due 2010.
K&F Acquisition is a New York City-based manufacturer of aircraft parts.
| Issuer: | K&F Acquisition Inc.
|
| Amount: | $315 million
|
| Maturity: | Nov. 15, 2014
|
| Security description: | Senior subordinated notes
|
| Bookrunners: | Lehman Brothers, Goldman Sachs & Co.
|
| Co-managers | Citigroup, JP Morgan
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 356 basis points
|
| Call features: | Callable after Nov. 15, 2009 at 103.875, 102.583, 101.292, par on or after Nov. 15, 2012
|
| Equity clawback: | Until Nov. 15, 2007 for 35% at 107.75
|
| Pricing date: | Nov. 5
|
| Settlement date: | Nov. 18
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: B-
|
| Price talk: | 7¾%-8%
|
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