By Paul A. Harris
Portland, Ore., Oct. 6 – Southeastern Grocers priced a $325 million issue of eight-year senior secured notes (B2/B+) at par to yield 5 5/8% on Tuesday, according to market sources.
The deal, which printed 12.5 basis points tighter than the 5¾% to 6% price talk, was eight-times to nine-times oversubscribed, half of it spoken for in reverse inquiry, a trader said.
The Jacksonville, Fla.-based food retailer appeared poised to print at 5½% but capitulated to the higher rate as capital markets in the United States fell off following news that as president Donald Trump ordered Treasury secretary Steven Mnuchin to discontinue negotiations with Congress on economic stimulus until after the election, the trader added.
Early guidance on the Southeastern Grocers deal was in the low 6% area.
BofA Securities Inc., Deutsche Bank Securities Inc. and Truist Securities Inc. were the joint bookrunners.
The notes were sold via issuers SEG Holding, LLC and SEG Finance Corp.
The company, which serves the southeastern United States, plans to use the proceeds, together with a draw on its revolver, to repay its term loan.
| Issuers: | SEG Holding, LLC and SEG Finance Corp.
|
| Amount: | $325 million
|
| Maturity: | Oct. 15, 2028
|
| Securities: | Senior secured notes
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| Bookrunners: | BofA Securities Inc., Deutsche Bank Securities Inc. and Truist Securities Inc.
|
| Coupon: | 5 5/8%
|
| Price: | Par
|
| Yield: | 5 5/8%
|
| Spread: | 504 bps
|
| Call protection: | Three years
|
| Trade date: | Oct. 6
|
| Settlement date: | Oct. 9
|
| Ratings: | Moody's: B2
|
| S&P: B+
|
| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 5¾% to 6%
|
| Marketing: | Roadshow
|
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