KIK Custom Products talks $390 million eight-year notes at discount to yield 10˝%

By Paul A. Harris

Portland, Ore., Aug. 17 – KIK Custom Products Inc. talked its $390 million offering of eight-year senior notes (Caa2/CCC) to price at a discount with an all-in yield of 10˝%, according to an informed source.

Talk comes 100 basis points wide of initial guidance in the mid-9% context, market sources said.

Books are scheduled to close at 2 p.m. ET on Tuesday.

In addition to price talk, covenant changes also surfaced on Monday.

These changes include revisions to the restricted payments and permitted liens covenants, in addition to changes in the covenant package’s definitions of total consolidated debt, secured debt and fixed charge coverage ratio. Also, language in the change-of-control provision was broadened.

Joint bookrunner Barclays will bill and deliver. BMO Securities, Nomura and Macquarie Capital are also joint bookrunners.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 75% of the coupon and feature a three-year 40% equity clawback.

The issuing entity is special purpose vehicle Kronos Acquisition Holdings Inc.

Proceeds will be used to help fund the buyout of KIK Custom Products by Centerbridge Partners LP from CI Capital Partners.

KIK Custom Holdings is a Toronto-based supplier of pool and spa treatment products and household and personal care products.

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