Published on 6/17/2016 in the Prospect News High Yield Daily.
New Issue: Acelity prices $190 million tap of Kinetic Concepts 7 7/8% notes at 105.25 to yield 6.239%
By Paul A. Harris
Portland, Ore., June 17 – Acelity LP Inc. priced a $190 million add-on to the 7 7/8% first-lien senior secured notes due Feb. 15, 2021 (Ba3/BB) issued by Kinetic Concepts, Inc. and KCI USA, Inc. at 105.25 to yield 6.239% on Friday, according to market sources.
The reoffer price came 25 cents richer than the rich end of the 104.75 to 105 price talk.
BofA Merrill Lynch was the left bookrunner. SunTrust Robinson Humphrey, Credit Suisse Securities (USA) LLC, Nomura, RBC Capital Markets and UBS Investment Bank were the joint bookrunner.
Kinetic Concepts and KCI are wholly owned subsidiaries of Acelity.
The San Antonio-based provider of wound care therapies plans to use the proceeds, together with cash on hand, to repay the remaining portion of the non-extended term loan under its senior dollar term E-1 credit facility due on May 4, 2018.
| Issuer: | Kinetic Concepts, Inc. and KCI USA, Inc.
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| Face amount: | $190 million
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| Proceeds: | $199,975,000
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| Maturity: | Feb. 15, 2021
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| Security description: | Add-on to 7 7/8% first-lien senior secured notes due Feb. 15, 2021
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| Left bookrunner: | BofA Merrill Lynch
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| Joint bookrunners: | Credit Suisse Securities (USA) LLC, SunTrust Robinson Humphrey, Goldman Sachs & Co., Nomura, RBC Capital Markets
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| Coupon: | 7 7/8%
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| Price: | 105.25
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| Yield: | 6.239%
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| Call: | Make-whole call at Treasuries plus 50 bps until Feb. 15, 2018, then callable at 103.938
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| Trade date: | June 17
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| Settlement date: | June 22 with accrued interest
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| Ratings: | Moody’s: Ba3
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| Standard & Poor’s: BB-
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| Distribution: | Rule 144A for life and Regulation S
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| Price talk: | 104.75 to 105
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| Marketing: | Quick to market
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| Original issue: | $400 million priced at par on Feb. 2, 2016
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| Fungibility: | Add-on notes will become fungible with original notes
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| Total issue size: | $590 million
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