Jeld-Wen to price $575 million seven-year notes during Aug. 8 week

By Paul A. Harris

Portland, Ore., Aug. 2 - Jeld-Wen, Inc. plans to price a $575 million offering of seven-year senior secured notes (expected ratings B3/CCC+) early in the Aug. 8 week, according to an informed source.

Bank of America Merrill Lynch, Wells Fargo Securities LLC, Barclays Capital Inc. and KeyBanc Capital Markets Inc. are the joint bookrunners.

The Rule 144A for life notes will be secured by a second-priority lien on substantially all of the assets of the company and its domestic subsidiaries and a pledge of the parent and foreign subsidiary stock.

The notes will become callable in three years at par plus 75% of the coupon. However a special call provision allows the issuer to redeem up to 15% of the notes at 103 during any 12-month period in years two and three.

The notes also feature a 101% poison put.

Proceeds, along with an investment by Onex Corp. and its affiliates, will be used to refinance debt and for general corporate purposes.

The issuing entity will be Jeld-Wen Escrow Corp., Inc., which will be merged with and into Jeld-Wen, Inc., a Klamath Falls, Ore.-based door and window manufacturer.

Toronto-based Onex announced on Monday that it has amended its previously announced agreement to invest in Jeld-Wen.

Under the amended agreement, Onex and its affiliates will invest $864 million compared to the previously announced $675 million.

Convertibles, preferreds eyed

The Onex group's investment will be made in two tranches. The first tranche is comprised of $675 million of convertible preferred stock representing about a 58% ownership stake, up from the previously contemplated $475 million, which would have represented a 39% stake. The second tranche is comprised of a $189 million convertible note that can be redeemed within 18 months with proceeds from the sale of certain non-core assets and, if not redeemed, will convert into additional shares of convertible preferred stock.

Upon closing of the transaction, Onex's share of the investment will be about $295 million.

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