Kratos Defense talks $300 million eight-year notes to yield 6½%-6¾%; pricing Wednesday

By Paul A. Harris

Portland, Ore., Nov. 8 – Kratos Defense & Security Solutions, Inc. talked its $300 million offering of eight-year senior secured notes (B3/B) to yield 6½% to 6¾%, according to market sources.

Books close at 11:30 a.m. ET on Wednesday, and the Rule 144A and Regulation S for life deal is set to price thereafter.

Official talk comes right on top of initial guidance.

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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