By Paul A. Harris
Portland, Ore., July 14 - Kratos Defense & Security Solutions, Inc. priced an upsized $115 million add-on to its 10% senior secured notes due June 1, 2017 (B3/B+/) at 105 on Thursday, according to an informed source.
The reoffer price came on top of the price talk.
As a result of the issue premium, the yield to maturity is 8.88% and the yield to worst is 8.707%.
Jefferies & Co., Inc. ran the books for the quick-to-market add-on, which was upsized from $80 million.
The San Diego-based defense contractor plans to use the proceeds to partially fund the acquisition of Integral Systems.
The original $225 million issue priced at par in May 2010.
A previous $285 million add-on priced at 107 to yield 8.515% in March 2011.
| Issuer: | Kratos Defense & Security Solutions, Inc.
|
| Face amount: | $115 million, increased from $80 million
|
| Proceeds: | $120.75 million
|
| Maturity: | June 1, 2017
|
| Security description: | Add-on to 10% senior secured notes
|
| Bookrunner: | Jefferies & Co., Inc.
|
| Co-managers: | KeyBanc Capital Markets Inc., B. Riley & Co., LLC
|
| Coupon: | 10%
|
| Price: | 105
|
| Yield to maturity: | 8.88%
|
| Yield to worst: | 8.707%
|
| Call features: | Make-whole call at Treasuries plus 50 bps until June 1, 2014, then callable at 105.0, 102.50, par on and after June 1, 2016
|
| Equity clawback: | 35% at 110 until to June 1, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | July 14
|
| Settlement date: | July 27 with accrued interest
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B+
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 105
|
| Marketing: | Quick to market
|
| Original issue: | $225 million priced at par in May 2010
|
| Previous add-on: | $285 million priced at 107 to yield 8.515% in March 2011
|
| Total issue size: | $625 million
|
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