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Snyder’s-Lance signs $1.13 billion in term loans for Diamond purchase
By Wendy Van Sickle
Columbus, Ohio, Dec. 17 – Snyder’s-Lance, Inc. obtained a new $1.13 billion term loan agreement in two tranches on Wednesday in connection with its planned acquisition of Diamond Foods, Inc., according to an 8-K filed with the Securities and Exchange Commission.
The agreement provides for a five-year $830 million tranche of term loans and a 10-year $300 million tranche.
Borrowings under the five-year facility will bear interest at Libor plus a margin of 87.5 basis points to 175 bps, based on the company’s adjusted total net debt-to-EBITDA ratio. The 10-year facility’s margin will range from 125 bps to 212.5 bps.
Bank of America Merrill Lynch was the bookrunner of the five-year facility and is administrative agent of both facilities.
For the five-year facility, joint lead arrangers were Manufacturers and Traders Trust Co. and Bank of America; Manufacturers and Traders was syndication agent.
For the 10-year loan, Bank of America and CoBank, ACB were joint bookrunners and joint lead arrangers.
TD Bank, NA and the Bank of Tokyo-Mitsubishi UJF, Ltd. were co-documentation agents of both tranches.
Financial covenants include a maximum total debt-to-EBITDA ratio and a minimum interest coverage ratio.
Proceeds may be used to fund part of the cash commitment of the previously announced $1.91 billion Diamond acquisition and to repay debt of the San Francisco-based packaged food company.
The lenders’ commitments will terminate on the earlier of 11:59 p.m. ET on May 27 or the termination of the merger agreement.
Also on Thursday, Snyder’s-Lance amended the terms of its existing credit agreement dated May 30, 2014 to permit the acquisition.
Snyder’s-Lance is a Charlotte, N.C.-based snack foods manufacturer.
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