Kratos Defense whispering $300 million eight-year notes at 6½%-6¾%; pricing expected Wednesday

By Paul A. Harris

Portland, Ore., Nov. 7 – As the market awaited official talk, Kratos Defense & Security Solutions, Inc. circulated initial price guidance of 6½% to 6¾% on its $300 million offering of eight-year senior secured notes (B), a trader said on Tuesday.

The Rule 144A and Regulation S for life deal is expected to price on Wednesday.

Goldman Sachs & Co. is the lead left bookrunner. J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc. are also bookrunners.

The notes come with three years of call protection. A special call provision would allow the issuer to redeem 10% of the notes annually at 103 during the non-call period.

The San Diego, Calif.-based defense contractor specializing in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, training and combat systems plans to use the proceeds to retire its 7% senior secured notes due 2019.

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