Franchise Group markets $650 million five-year senior secured notes; initial talk 8¼% area

By Paul A. Harris

Portland, Ore., Oct. 27 – Franchise Group Inc. began a telephone roadshow on Tuesday for a $650 million offering of five-year senior secured notes, according to market sources.

Initial guidance has the notes coming to yield in the 8¼% area, a trader said.

The deal, which was scheduled to be the subject of a mid-Tuesday morning conference call with investors, will be marketed on a roadshow through Thursday and is expected to price on Friday.

Lead left bookrunner Morgan Stanley & Co. LLC will bill and deliver. J.P. Morgan Securities LLC, Wells Fargo Securities LLC and Citizens Capital Markets Inc. are the joint bookrunners. B. Riley FBR Inc. is the co-manager.

The Rule 144A and Regulation S for life notes become callable after two years at par plus 50% of the coupon.

The Virginia Beach, Va.-based multi-brand operator of franchised and franchisable businesses plans to use the proceeds to repay debt.

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