Published on 5/17/2018 in the Prospect News High Yield Daily.
New Issue: Hearthside Food sells downsized $350 million 8½% eight-year notes at par to yield 8.499%
By Paul A. Harris
Portland, Ore., May 17 – Hearthside Food Solutions LLC priced a downsized $350 million issue of 8½% eight-year senior notes (Caa2/CCC+) at par to yield 8.499% on Thursday, according to market sources.
The issue size was decreased from $375 million, with proceeds shifted to the term loan, which increased to $1,295,000,000 from $1.27 billion.
The yield came at the wide end of the 8¼% to 8½% yield talk. There were also covenant changes bearing primarily upon how the company may disburse cash and incur additional debt.
Joint bookrunner Barclays will bill and deliver. Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, Jefferies LLC, Nomura and RBC Capital Markets LLC were also joint bookrunners.
Proceeds will be used to support the pending acquisition of the Downers Grove, Ill.-based bakery, nutrition bar, snack and packaged food producer by Charlesbank Capital Partners and Partners Group.
| Issuers: | Matterhorn Merger Sub LLC, H-Food Holdings LLC, Matterhorn Finance Sub Inc., Hearthside Finance
|
| Amount: | $350 million, decreased from $375 million
|
| Maturity: | June 1, 2026
|
| Securities: | Senior notes
|
| Bookrunners: | Barclays (bill and deliver), Goldman Sachs & Co., Credit Suisse Securities (USA) LLC, Jefferies LLC, Nomura Securities Co., RBC Capital Markets LLC
|
| Coupon: | 8½%
|
| Price: | Par
|
| Yield: | 8.499%
|
| Spread: | 539 bps
|
| First call: | June 1, 2021 at 104.25
|
| Equity clawback: | 40% at 108.5 until June 1, 2021
|
| Trade date: | May 17
|
| Settlement date: | May 23
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| Ratings: | Moody's: Caa2
|
| S&P: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 8¼% to 8½%
|
| Marketing: | Roadshow
|
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