Michael Foods $525 million credit facility to launch on Tuesday

By Sara Rosenberg

New York, April 17 - Michael Foods Inc. is scheduled to hold a bank meeting on Tuesday to launch its proposed $525 million credit facility (Ba3), according to a market source.

Bank of America is the lead bank on the deal that is being marketed to existing lenders only.

The facility is expected to consist of a $75 million 31/2-year revolver and $450 million in term loans that will be divided into a term loan A and a term loan B. The term loan A can be up to $275 million or the term loan B can be up to $275 million, the source said.

As was previously reported, price talk on the revolver and the term loan A is expected to come around Libor plus 400 basis points, and price talk on the term loan B is expected around Libor plus 450 bps.

All three tranches will have a 2% Libor floor.

Original issue discounts and upfront fees are still to be determined, the source added.

Proceeds will be used to refinance the company's existing credit facility.

Michael Foods is a Minnetonka, Minn.-based food processor and distributor.

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