Michael Foods $154 million holding company bonds yield 12% in secondary market trade

By Paul A. Harris

St. Louis, June 4 - Approximately $154 million of M-Foods Holdings 9¾% senior discount notes due Oct. 1, 2013 changed hands in a secondary trade that resulted in a yield of about 12%, according to a high-yield mutual fund manager, who spoke Thursday on background.

The issuing entity is the parent of Michael Foods, Inc.

Banc of America Securities LLC led the trade, the fund manager added.

In September 2004 M-Foods Holdings sold $154.06 million face amount of senior discount notes due Oct. 1, 2013 at 64.91 to yield 9¾% in a Rule 144A for life deal led by Banc of America Securities, according to Prospect News data.

The notes, initially issued with a zero coupon, were scheduled to become cash-pay on April 1 of this year.

The notes also became callable on April 1 at 104.875.

On Sept. 17, 2004 M-Foods Holdings paid a dividend of about $98.1 million to its ultimate parent, Michael Foods Investors LLC, with the proceeds from the sale of its 9¾% senior discount notes due Oct. 1, 2013, according to documents filed at the time with the Securities and Exchange Commission.

Minnetonka, Minn.-based Michael Foods is a diversified food processor and distributor with particular interests in egg products, refrigerated grocery products and refrigerated potato products.

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