Conagra Brands gets $1.3 billion term loan, $1.6 billion revolver

By Wendy Van Sickle

Columbus, Ohio, July 17 – Conagra Brands, Inc. entered into a $1.3 billion term loan agreement and a $1.6 billion amended and restated revolving credit agreement on July 11, according to an 8-K filed Friday with the Securities and Exchange Commission.

Term loan

The term loan facility is unsecured and provides for a $650 million tranche of three-year term loans and a $650 million tranche of five-year term loans. The company expects to borrow the full amount of each tranche to fund a portion of the cash consideration of its previously announced acquisition of Pinnacle Foods Inc. The term loans mature on the third and fifth anniversaries of funding, which is expected to occur simultaneously with closing the acquisition.

The company previously received commitments from lenders for a 364-day bridge loan facility of up to $9 billion for the acquisition, and those commitments were reduced by the amount of the commitments under the term loan agreement.

The term loans will bear interest at Libor plus a margin ranging from 100 basis points to 162.5 bps for the three-year tranche and 112.5 bps to 175 bps for the five-year tranche, depending on the company’s senior unsecured long-term debt ratings.

Goldman Sachs Bank USA, Bank of America Merrill Lynch, JPMorgan Chase Bank, NA and Mizuho Bank, Ltd. are the joint lead arrangers and joint bookrunners. Bank of America, NA is administrative agent, Goldman Sachs is syndication agent, and JPMorgan, Mizuho Bank, MUFG and Wells Fargo Bank, NA are documentation agents.

Revolver

The revolver provided for under the amended and restated revolving credit agreement replaces the revolver provided under the company’s credit agreement dated Feb. 16, 2017. That revolver was due to mature on Feb 16, 2022, and no borrowings were outstanding under that credit agreement upon its termination.

The new revolver matures on July 11, 2023 and is unsecured.

Borrowings bear interest at Libor plus a margin ranging from 91 bps to 150 bps, and there is a facility fee ranging from 9 bps to 25 bps, both depending on the company’s senior unsecured long-term debt ratings.

The company will also pay a facility fee ranging from 9 bps to 25 bps, based on debt ratings.

Bank of America Merrill Lynch, JPMorgan Chase Bank, NA and Mizuho Bank, Ltd. are the joint lead arrangers and joint bookrunners. Bank of America, NA is administrative agent, JPMorgan Chase Bank, NA is syndication agent, and Mizuho Bank, MUFG, Wells Fargo Bank, NA and Goldman Sachs Bank are documentation agents.

Proceeds may be used for general corporate purposes.

The packaged food company based is based in Chicago.

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