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Heinz readies launch of $12 billion credit facility for Thursday
By Sara Rosenberg
New York, March 12 - H.J. Heinz Co. set a bank meeting for 1:30 p.m. ET in New York on Thursday to launch its $12 billion senior secured credit facility (BB/BB+), according to a market source.
J.P. Morgan Securities LLC, Well Fargo Securities LLC, Barclays and Citigroup Global Markets Inc. are the arrangers on the deal.
The facility consists of a $1.5 billion revolver, $8.5 billion of six-year term loan B-1 and seven-year term loan B-2 debt, up to $1.4 billion euro equivalent in six-year term loan B-1 and seven-year term loan B-2 debt, and up to $600 million in sterling-denominated six-year term loan B-1 and seven-year term loan B-2 debt, the source said.
Price talk on the U.S. term loan B-1 and B-2 are talked at Libor plus 275 basis points to 300 bps with a 1% Libor floor and an original issue discount of 991/2, and talk on the euro and sterling term loan B-1 and B-2 is Libor plus 300 bps to 325 bps with a 1% Libor floor and a discount of 991/2, the source continued.
There is 101 soft call protection for one year on the term loan B-1 debt and soft call protection of 101 for two years on the B-2 debt.
Proceeds will be used to help fund the company's buyout by Berkshire Hathaway and 3G Capital for $72.50 in cash per share. The deal, which includes the assumption of Heinz's outstanding debt, is valued at about $28 billion.
Other funds for the transaction will come from $16.24 billion of equity and $2.1 billion in senior secured second-lien notes.
Closing is expected in the third quarter, subject to shareholder approval and regulatory approvals.
Heinz is a Pittsburgh-based food product company.
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