UPDATE 1-KKR-backed MMI to price $300 mln bond at 8 pct-source
* First time a high-yield bond used to take out a buyout loan in Asia
* Asian borrowers tapping non-traditional funding sources as IPO markets, bank loans difficult
By Stephen Aldred
HONG KONG, Feb 17 (Reuters) - MMI International, a technology company owned by private equity fund KKR & Co LP , will price its $300 million five-year bond at 8 percent on Friday in New York, the bottom end of price guidance, after receiving strong support from U.S. investors, according to a source familiar with the matter.
This is the first time a high-yield bond in Asia has been used to take out a buyout loan, in a sign that companies in Asia are tapping non-traditional funding avenues to overcome difficult initial public offering and bank loans markets.
The non-call three 144a issue received strong orders from U.S. investors and solid support in Asia, said the source, who declined to be named because he was not authorised to speak to the media.
Singapore-based MMI, which makes parts for hard disk drives and has U.S.-based Seagate Technology Plc as its major client, appointed Credit Suisse Group AG, JP Morgan Chase & Co and UBS AG as lead banks for the bond.
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 Markets, 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.
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.
But the retreat of European banks from leveraged lending in Asia has gathered steam in recent months, and pricing on the debt has increased.
KKR declined comment. MMI could not immediately be reached for comment.
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