North Atlantic Trading sets talk for $285 million two-part note issue

By Paul A. Harris

Portland, Ore., July 20 - North Atlantic Trading Co. Inc. set price talk for its $285 million two-part offering of senior secured notes on Wednesday, according to an informed source.

A $205 million tranche of five-year second-lien notes (B2/B-) is talked with an 11½% coupon at an issue price of 98 to yield in the 12% area.

An $80 million tranche of 5.5-year third-lien notes (Caa2/CCC) is talked with an 11% cash coupon and an 8% PIK coupon at 97 to yield in the 20% area.

Pricing is set for Thursday morning.

Jefferies & Co., Inc. is the bookrunner.

Both tranches of Rule 144A for life notes become callable after two years at par plus 75% of the coupon.

Proceeds will be used to redeem outstanding notes and to repay all other debt.

The only first-lien debt that the company intends to put in place is a $15 million undrawn revolver.

North Atlantic Trading is a Darien, Conn.-based manufacturer and marketer of loose leaf chewing tobacco in the United States.

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