Knife River talks upsized $425 million eight-year notes at 7¾%-8%; pricing Tuesday

By Paul A. Harris

Portland, Ore., April 11 – Knife River Holding Co., a wholly owned subsidiary of MDU Resources Group, Inc., talked an upsized $425 million offering of senior notes due 2031 (Ba3/BB) to yield 7¾% to 8%, according to market sources.

The deal, upsized from $400 million, is heard to be five-times oversubscribed, a bond trader said.

Official talk comes inside of the 8% to 8¼% initial guidance.

Pricing is expected later on Tuesday.

The Rule 144A and Regulation S eight-year notes come with three years of call protection.

J.P. Morgan Securities LLC, BofA Securities Inc., MUFG Securities Americas Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the joint bookrunners.

Proceeds will be used to help fund MDU Resources' spinoff of Knife River Corp., a supplier of crushed stone, sand, gravel and related construction materials. The new parent will be Knife River Holding.

Bismarck, N.D.-based MDU Resources Group provides products and services through its regulated energy delivery and construction materials and services businesses.

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