BI-LO talks $285 million eight-year secured notes with 9%-9¼% yield

By Paul A. Harris

Portland, Ore., Jan. 26 - BI-LO, LLC and BI-LO Finance Corp. talked their $285 million offering of eight-year senior secured notes (B2/B) with a 9% to 9¼% yield on Wednesday, according to an informed source.

The books close at 9 a.m. ET on Thursday, and the deal is set to price thereafter.

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the joint bookrunners for the Rule 144A and Regulation S for life offering.

The notes will feature standard, incurrence-based high-yield covenants and will come with four years of call protection. However, a special call provision would allow the issuer to call 10% of the notes annually at 103.

The notes also come with a 101% poison put.

Proceeds will be used to repay the outstanding balance under the company's existing $200 million senior secured term loan due 2015 and to fund an approximately $74 million cash distribution to the sponsor.

The prospective issuer is a Greenville, S.C.-based supermarket operator.

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