KeHE starts roadshow for $750 million five-year secured notes; pricing expected Tuesday

By Paul A. Harris

Portland, Ore., Jan. 17 – KeHE Distributors, LLC started a roadshow on Wednesday for a $750 million offering of senior secured notes due 2029 (B3/B), according to market sources.

Initial guidance is in the low-9% area, according to bond trader, who added that upon its announcement the deal was half spoken for in reverse inquiry.

The Rule 144A for life offering, which was set to kick off on a late Wednesday morning conference call with investors, is expected to price on Tuesday.

The five-year notes become subject to an initial call in two years at par plus 50% of the coupon.

BMO Capital Markets Corp. is the left bookrunner. BofA Securities Inc., J.P. Morgan Securities LLC, KeyBanc Capital Markets Inc., Rabo Securities USA Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC are the joint bookrunners.

The Naperville, Ill.-based specialty food distributor plans to use the proceeds to fully redeem its 8 5/8% senior secured second-lien notes due 2026, to repay a portion of its ABL balance, to purchase all class A preferred equity held by TowerBrook and a portion of the class B common equity held by TowerBrook and to pay a related cumulative capital true up contribution.

The co-issuers are KeHE Finance Corp. and NextWave Distribution, Inc.

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