School Specialty rejigs notes: $425 million seniors talked 9¼%-9½%, $225 million subs at 200 bps behind

By Paul A. Harris

St. Louis, Sept. 21 - School Specialty Inc. has restructured the tranche sizes of its $650 million two-part offering of high-yield bonds in addition to issuing price talk, according to a syndicate source.

The Greenville, Wis., supplemental education company increased its tranche of eight-year senior notes (B3/CCC+) to $425 million from $350 million and is talking the notes at 9¼% to 9½%.

Meanwhile School Specialty has downsized its tranche of 10-year senior subordinated notes (Caa2/CCC+) to $225 million from $300 million and is talking the notes to price 200 basis points behind the senior notes, or at about 11¼% to 11½%.

Pricing is expected on Friday.

Banc of America Securities LLC, JP Morgan and Deutsche Bank Securities are joint bookrunners for the Rule 144A with registration rights notes.

Proceeds will be used to help finance the leveraged buyout of the company by Bain Capital and Thomas H. Lee Partners in a $1.5 billion transaction, as well as for general corporate purposes.

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