Heartland Dental launches upsized $535 million 10½% five-year notes at par; pricing Friday

By Paul A. Harris

Portland, Ore., May 5 – Heartland Dental, LLC and co-issuer Heartland Dental Finance Corp. launched an upsized $535 million offering of senior secured notes due April 30, 2028 (B2/B) with a 10½% coupon at par, according to market sources.

The deal, which is upsized from $500 million, is set to price on Friday.

The offering launched in the middle of talk in the 10½% area. Initial guidance was in the mid-10% area.

The Rule 144A and Regulation S for life five-year notes come with two years of call protection and feature a springing maturity.

The Effingham, Ill.-based dental support organization plans to use the proceeds plus a concurrent $1.85 billion term loan, $200 million of new cash equity and a $75 million new strategic partner contribution, to partially refinance extending lenders as part of an amend and extend of its existing term loan, and for general corporate purposes.

Incremental proceeds resulting from the $35 million upsize will also be used to reduce the size of the term loan.

Jefferies LLC is the left arranger. KKR Capital Markets LLC, BMO Capital Markets Corp., TD Securities (USA) LLC, Credit Agricole, Mizuho Securities USA Inc., MUFG Securities Americas Inc., SMBC Nikko Securities America Inc. and Macquarie Capital (USA) Inc. are the joint arrangers.

The sponsors are KKR and the Ontario Teachers’ Pension Plan.

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