New Issue: Leiner Health Products sells $150 million eight-year notes to yield 11%

By Paul A. Harris

St. Louis, May 24 - Leiner Merger Corp. sold $150 million of eight-year senior subordinated notes (B3/CCC+) at par Monday to yield 11%, according to a syndicate source.

Price talk was 11% to 11¼%.

UBS Investment Bank, Credit Suisse First Boston and Morgan Stanley were the underwriters of the Rule 144A issue.

Proceeds will be used to acquire capital stock as part of NorthCastle's and Golden Gate Capital's recapitalization of the company.

The issuer will be merged into Leiner Health Products Inc., a Carson, Calif.-based manufacturer of supplements, diet aids and pharmaceuticals.

Issuer:	Leiner Merger Corp. (to be merged into Leiner Health Products Inc.)
Amount:	$150 million
Maturity:	June 1, 2012
Security description:	Senior subordinated notes
Underwriters:	UBS Investment Bank, Credit Suisse First Boston, Morgan Stanley
Coupon:	11%
Price:	Par
Yield:	11%
Spread:	640 basis points
Call features:	Callable after June 1, 2008 at 105.50, 102.75, par on or after June 1, 2010
Equity clawback:	Until June 1, 2007 for 40% at 111.0
Pricing date:	May 24
Settlement date:	May 27
Ratings:	Moody's: B3
	Standard & Poor's: CCC+
Price talk:	11% to 11¼%

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