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Levi Strauss Drives By Bond Mart With $475M Offering To Refi 7.625% Notes

Levi Strauss has announced a $475 million offering of senior notes via Bank of America, Goldman Sachs and J.P. Morgan, along with co-managers HSBC, Wells Fargo, Deutsche Bank and Scotia, according to sources.

Pricing is expected today following an investor call at 10:30 a.m. EDT, sources indicate, and proceeds are being used to tender for the existing 7.625% senior notes due 2020. The 7.625% notes are currently callable at 103.81, and the company is offering a premium of $1,042.50, filings show.

Today's pitch is for 10-year (non-call five) senior notes with expected ratings of BB/Ba2, and Moody's has already affirmed that. Note that Moody's upgraded the corporate family rating and senior unsecured notes one notch, to Ba1 and Ba2, respectively, on April 16. The ratings action "considers the company's strong commitment to strong credit metrics and debt reduction, evidenced by the company's utilization of cash to reduce its funded debt load by over $500 million in the past two fiscal years," Moody's stated. The rating agency also said it expects debt to continue to modestly fall in the next 12-18 months.

Structure includes an equity clawback at 40% at par plus the coupon for the first three years.

Levi’s last tap of the market was a $140 million add-on to its 6.875% notes due 2022, priced in March 2013. That issue recently traded at 109.125, yielding 3.817%, according to trade data.

Levi Strauss' products are sold in more than 110 countries, in roughly 50,000 retail locations worldwide grouped into three geographic regions: Americas, Europe, and Asia Pacific.

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