Darling cuts spread on $300 million term loan to Libor plus 350 bps

By Sara Rosenberg

New York, Dec. 10 - Darling International Inc. reduced pricing on its $300 million six-year term loan B (Ba2/BB+) to Libor plus 350 basis points from Libor plus 400 bps and tightened the original issue discount to 99½ from 99, according to a market source.

The 1.5% Libor floor was left unchanged, the source said.

Recommitments are due on Monday, and allocations are expected to go out later that week.

The company's $625 million senior secured credit facility also includes a $325 million five-year revolver (Ba2), of which $175 million will be drawn at close. Pricing on this tranche is expected at Libor plus 325 bps with a 50 bps commitment fee.

JPMorgan, BMO Capital, Goldman Sachs and PNC Bank are the lead banks on the deal.

Proceeds from the facility, along with $250 million of eight-year senior unsecured notes and cash on hand, will be used to help fund the acquisition of Griffin Industries Inc. for $740 million in cash and about $100 million of common stock.

Closing is targeted for the week of Dec. 13, subject to customary conditions, including the expiration of the Hart-Scott-Rodino waiting period.

Total funded debt to EBITDA will exceed 3.0 times after completion of the transaction.

Darling is an Irving, Texas-based provider of rendering, recycling and recovery services to the food industry. Griffin is Cold Spring, Ky.-based provider of rendering, bakery feed and cooking oil recycling services.

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