Stater $685 million notes: fixed talked at 8 1/8%-8 3/8%, floaters at Libor plus 350-375 bps

By Paul A. Harris

St. Louis, June 8 - Stater Bros. Holdings Inc. issued price talk Tuesday on its $685 million two-tranche offering of high-yield bonds (B1/BB-), according to an informed source.

Both tranches are expected to price Wednesday afternoon.

Banc of America Securities is the bookrunner for the Rule 144A deals.

The first tranche - a $525 million offering of eight-year senior notes that are non-callable for four years - is talked to yield 8 1/8% to 8 3/8%.

Meanwhile, the second tranche - a $160 million offering of six-year senior floating-rate notes that are non-callable for two years - are talked at three-month Libor plus 350 to 375 basis points.

Proceeds will be used to fund the tender for the company's 10¾% senior notes due 2006, to pay for the acquisition and construction of a new distribution center, and for general corporate purposes.

The issuer is a Colton, Calif.-based supermarket chain operating in Southern California.

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