Keurig reworks U.S. and euro term loan B sizes, raises pricing

By Sara Rosenberg

New York, Feb. 5 – Keurig Green Mountain Inc. upsized its euro seven-year covenant-light term loan B to up to €900 million from €250 million and is downsizing its U.S. seven-year covenant-light term loan B from $2,675,000,000, with the final size still to be determined, according to a market source.

Also, pricing on the U.S. term loan B was increased to Libor plus 450 basis points from talk of Libor plus 375 bps to 400 bps, and pricing on the euro term loan was lifted to Euribor plus 425 bps from talk of Euribor plus 375 bps to 400 bps, the source said.

In addition, original issue discount talk on the total $2.95 billion U.S. and euro term loan B widened to 98 to 98.5 from 99, and the 101 soft call protection was extended to one year from six months.

The term loan B debt still has a 0.75% floor.

The company’s $6.4 billion senior secured credit facility (Ba3/BB) also includes a $500 million five-year revolver and a $2.95 billion five-year term loan A.

Recommitments were due at 5 p.m. ET on Friday, 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.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.