KKR-backed MMI in rare $300 mln high-yield bond

HONG KONG Wed Feb 8, 2012 4:51am EST

HONG KONG SINGAPORE Feb 8 (Reuters) - MMI International, a technology company owned by private equity fund KKR & Co LP, is planning a rare $300 million high-yield bond to refinance a buyout loan, in a sign that companies are tapping non-traditional funding avenues to overcome difficult initial public offering and bank loans markets.

Singapore-based MMI, which makes parts for hard disk drives and has U.S.-based Seagate Technology Plc as its major client, said it had appointed Credit Suisse Group AG, JP Morgan Chase & Co and UBS AG as lead banks for the five-year bond.

The $300 million bond will pay down about $222 million outstanding on the 2007 loan, and $75 million of a bridge loan that an MMI company used to acquire IntriPlex Technologies.

UBS, with Deutsche Bank AG and Macquarie Bank, was a lead on a planned $1 billion initial public offering for MMI in 2011, which was pulled due to market conditions.

KKR subsidiary, KKR Capital Management, is also a co-manager for the bond. Bankers familiar with the U.S. fund said the subsidiary's role illustrated the firm's plans to diversify revenue through fee income, and to support its portfolio companies on their deals in Asia.

KKR declined comment on the deal.

Thomson Reuters publication IFR Asia reported on the bond earlier on Wednesday.

High-yield bonds, also known as junk bonds because of their sub-investment grade ratings, are commonly used in the United States and Europe to finance private equity buyouts, but Asia's private equity buyouts have up to now been financed by cheaper bank loans.

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