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Heinz focuses on all U.S. structure, eliminates euro, sterling plans
By Sara Rosenberg
New York, March 21 - H.J. Heinz Co. has decided to move forward with a completely U.S. dollar capital structure and will not pursue $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, according to market sources.
The euro and sterling B-1 and B-2 debt was talked at Libor plus 300 basis points to 325 bps with a 1% Libor floor and an original issue discount of 991/2.
There was 101 soft call protection for one year on the euro and sterling term loan B-1 debt and soft call protection of 101 for two years on the B-2 debt.
Meanwhile, price talk on the company's now $10.5 billion of U.S. term loan B-1 and B-2 debt, up from $8.5 billion, remained at Libor plus 275 bps to 300 bps with a 1% Libor floor and an original issue discount of 991/2, sources said.
The term loan B-1 has 101 soft call protection for one year, and the term loan B-2 has soft call protection of 101 for two years.
The company's $12 billion senior secured credit facility (Ba2/BB/BB+) also includes a $1.5 billion revolver.
Commitments are due at noon ET on Friday.
J.P. Morgan Securities LLC, Well Fargo Securities LLC, Barclays and Citigroup Global Markets Inc. are the arrangers on the deal.
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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