Levi Strauss drops add-on tranche from $550 million equivalent offering

By Paul A. Harris

St. Louis, March 4 - Levi Strauss & Co. has withdrawn a planned add-on tranche from its $550 million equivalent offering of high-yield notes (Caa3/B-), according to a syndicate source. The overall size of the deal remains unchanged.

The add-on, which was to have tapped the company's 9¾% senior notes due Jan. 15, 2015, was dropped due to the strength of the two tranches of new notes, the source added.

The San Francisco apparel maker now plans to sell U.S. dollar-denominated seven-year senior floating-rate notes, which will be non-callable for two years. The notes are talked at the Libor plus 475 basis points area.

The company also plans to sell euro-denominated eight-year senior fixed-rate notes, which will be non-callable for four years. The notes are talked in the 8¾% area.

Tranche sizes remain to be determined.

Pricing is expected on Monday.

Banc of America Securities LLC and Citigroup are joint bookrunners for the Rule 144A notes. Goldman Sachs & Co., Bear Stearns & Co. and Credit Suisse First Boston are co-managers.

Proceeds will be used to fund the tender for the company's 11 5/8% senior notes due 2008.

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