Keurig talks $2.68 billion U.S. term B at Libor plus 375-400 bps

By Sara Rosenberg

New York, Jan. 19 – Keurig Green Mountain Inc. launched to U.S. investors on Tuesday its $2,675,000,000 seven-year term loan B with price talk of Libor plus 375 basis points to 400 bps with a 0.75% Libor floor and an original issue discount of 99, according to a market source.

The term loan B has 101 soft call protection for six months, the source said.

The company’s $6.4 billion senior secured credit facility also includes a $500 million five-year revolver, a $2.95 billion five-year term loan A and a $275 million euro-equivalent seven-year term loan B.

Initial pricing on the revolver and term loan A is talked at Libor plus 200 bps, the source continued. The spread on these tranches can range from Libor plus 125 bps to 225 bps based on a total net leverage grid.

A bank meeting for European investors will take place in London on Thursday.

Commitments are due on Feb. 2, the source added.

J.P. Morgan Securities LLC, Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and Rabobank are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of the company by a JAB Holding Co.-led investor group and to refinance existing debt.

Under the agreement, Keurig is being bought for $92.00 per share in cash, or a total equity value of about $13.9 billion.

JAB is buying Keurig in partnership with strategic minority investors who are already shareholders in Jacobs Douwe Egberts BV, a coffee company, including Mondelez International and entities affiliated with BDT Capital Partners.

Other funds for the transaction will come from about $8.5 billion in equity.

Closing is expected on or about Feb. 29, subject to customary conditions, including receipt of regulatory approvals and shareholder approval. The transaction is not subject to a financing condition.

Keurig is a Waterbury, Vt.-based personal beverage system company.

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