Acelity talks $1.75 billion second-lien notes to yield in 9½% area; pricing Tuesday

By Paul A. Harris

Portland, Ore., Sept. 12 – Acelity LP Inc. talked its $1.75 billion offering of five-year second-lien senior secured notes to yield in the 9½% area, according to a syndicate source.

The Rule 144A and Regulation S deal is set to price on Tuesday.

Early guidance has the notes coming with a yield in the mid-9% range, a trader said.

Goldman Sachs & Co. is the left bookrunner. BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Nomura Securities, SunTrust Robinson Humphrey Inc., RBC Capital Markets and UBS Investment Bank are the joint bookrunners.

The notes come with two years of call protection.

The San Antonio-based medical device company, which is issuing the notes via its subsidiaries Kinetic Concepts, Inc. and KCI USA, Inc., plans to use the proceeds, together with proceeds from an equity contribution and cash on hand, including a draw on the revolving credit facility, to redeem all of its second-lien notes.

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