Kellogg enters up to $1 billion bridge term loan with nine lenders

By Jennifer Chiou

New York, March 21 - Kellogg Co. entered into on Friday a $1 billion 364-day senior bridge term loan facility with nine lenders, including Barclays Bank plc as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

In mid-February, the company put in place a commitment letter for the loan to help fund its acquisition of Procter & Gamble Co.'s Pringles business.

JPMorgan Chase Bank, NA is the syndication agent. Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, Rabobank Nederland, New York Branch and Wells Fargo Bank, NA are the documentation agents. Barclays Capital is the bookrunner and arranger.

Borrowings will bear interest at the base rate or the reserve adjusted Libor plus a margin. The base rate is equal to the greatest of the rate determined from time to time by the administrative agent as its prime rate in effect at its principal office in New York, the federal funds effective rate plus 50 basis points and one-month reserve adjusted Libor plus 100 bps, the filing said.

The company previously said the financial covenants will be substantially based on the corresponding provisions of its existing credit agreement.

As previously reported, Kellogg agreed to acquire the Pringles business for $2.7 billion in cash last month. The acquisition is targeted to close by June 30.

The company will fund the acquisition with cash on hand and about $2 billion of debt.

Kellogg is a Battle Creek, Mich.-based food and cereal company. Procter & Gamble is a consumer products company based in Cincinnati.

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