US Foods upsizes to $600 million, launches eight-year notes to yield 5 7/8%

By Paul A. Harris

Portland, Ore., June 13 – US Foods Holding Corp. upsized its offering of eight-year senior notes (Caa2/B) to yield 5 7/8%, market sources said late Monday.

The deal amount is increased from $500 million.

The offer launched at the tight end of yield talk in the 6% area. Initial guidance was 6¼% to 6½%.

The notes were expected to allocate on Monday, however final terms were unavailable at press time.

Deutsche Bank Securities Inc., Citigroup Global Markets, BofA Merrill Lynch, BMO Securities, Natixis, Wells Fargo Securities LLC, Goldman Sachs & Co., JP Morgan Securities LLC, Morgan Stanley & Co. and KKR Capital Markets are joint bookrunners for the Rule 144A and Regulation S sale, which will be issued by subsidiary US Foods, Inc.

The notes come with three years of call protection.

The Rosemont, Ill.-based foodservice distributor plans to use the proceeds, together with borrowings under a new concurrent senior secured term loan B and proceeds from the initial public offering of US Foods Holding Corp., to repay its existing term loan B, to redeem its 8½% senior notes due 2019 and to repay its CMBS fixed facility, with any remaining proceeds to be used for general corporate purposes.

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