Keurig Green Mountain sets U.S. and euro term B sizes, issue prices

By Sara Rosenberg

New York, Feb. 9 – Keurig Green Mountain Inc. firmed its U.S. seven-year covenant-light term loan B size at $1,875,000,000 and its euro seven-year covenant-light term loan B size at a $950 million equivalent, bringing the total amount of term loan B debt to $2,825,000,000, versus a $2.95 billion total size at launch, according to market sources.

At launch, the euro portion of the term loan B was sized at €250 million, but earlier in syndication it was increased to up to €900 million as the U.S. portion of the term loan B was downsized.

Also, the original issue discount on the U.S. and euro term loan B finalized at 98, the wide end of revised talk of 98 to 98.5 and wide of initial talk of 99, sources said.

Pricing on the U.S. term loan B is Libor plus 450 basis points with a 0.75% Libor floor, and pricing on the euro term loan B is Euribor plus 425 bps with a 0.75% floor.

All of the term loan B debt has 101 soft call protection for one year.

Earlier in syndication, pricing on both the U.S. and euro term loan B was lifted from talk of Libor/Euribor plus 375 bps to 400 bps and the call protection was extended from six months.

The company’s $6.4 billion senior secured credit facility (Ba3/BB) also includes a $500 million five-year revolver and a $3,075,000,000 five-year term loan A that was upsized from $2.95 billion in connection with the term loan B downsizing.

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 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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