Chefs’ Warehouse talks $250 million six-year convertibles to yield 2.125%-2.625%, up 27.5%-32.5%

By Abigail W. Adams

Portland, Me., Dec. 7 – Chefs’ Warehouse Inc. plans to price $250 million of six-year convertible notes after the market close on Thursday with price talk for a coupon of 2.125% to 2.625% and an initial conversion premium of 27.5% to 32.5%, according to a market source.

Jefferies LLC and BMO Capital Markets Corp. are bookrunners for the Rule 144A offering, which carries a greenshoe of $37.5 million.

The notes are non-callable for three years and then subject to a 130% hurdle.

They will be settled in cash, shares or a combination of both at the company’s option.

Concurrently, the company will enter into privately negotiated transactions to exchange a portion of its 1.875% convertible notes due 2024 for cash and shares.

The company may enter into further exchanges for the 1.875% notes following the completion of the offering.

Proceeds will be used to pay the cash portion of the convertible note exchanges and for general corporate purposes.

The Chefs’ Warehouse is a Ridgefield, Conn.-based distributor of specialty food products.

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