Prison-Food Vendor TKC Paying Up With 12% Yield on Loan Deal
- Cost to borrow is exceptionally high for the loan market
- Past debt sale struggled due to connection to prison industry
This article is for subscribers only.
Prison-food vendor TKC Holdings Inc. sold a leveraged loan on Tuesday with a 12% yield, a high level rarely seen in the market, according to a person with knowledge of the matter.
The yield increases to 13% if the company chooses to pay the interest in more debt rather than cash in the first year, and increases to 13.5% in future years, the person said, asking not to be identified discussing a private transaction. The company had structured the offering as a “payment-in-kind” deal where it can choose whether to pay the coupon in cash or debt.