Seaboard obtains $500 million seven-year loan at Libor plus 162.5 bps

By Wendy Van Sickle

Columbus, Ohio, Dec. 9 – Seaboard Corp. obtained a seven-year $500 million unsecured term loan on Monday, according to an 8-K filed with the Securities and Exchange Commission.

Borrowings initially bear interest at Libor plus 162.5 basis points. The margin ranges from 162.5 bps to 212.5 bps, depending on the company’s ratio of debt to capitalization.

CoBank, ACB acted as bookrunner, lead arranger and administrative agent. Farm Credit Services of America, PCA acted as joint lead arranger.

The loan agreement provides for quarterly amortization of 2.5% in each of years two and three, 5% in year four and 7.5% in each of years five through seven, with the balance due at the Dec. 4, 2022 maturity.

The credit agreement contains covenants restricting Seaboard’s ability to grant liens on assets, incur debt, make certain acquisitions, investments and asset dispositions in excess of specified amounts and make certain restricted payments and dividends and distributions to shareholders in excess of specified amounts.

At least $150 million of the proceeds are to be used to fund investments in Seaboard Triumph Foods, LLC, a previously announced joint venture between Seaboard and Triumph Foods. The remainder is to be used for working capital and general corporate purposes.

Seaboard is a Shawnee Mission, Kan.-based agribusiness and transportation company.

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