ConAgra Foods announced today (20 April) that it has completed a move to refinance outstanding debt, with the purchase of US$290.7m of 6.7% senior notes.
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Earlier this month, ConAgra offered $1bn in senior notes – $500m in 5.875% senior notes due in 2014 and $500m in 7% senior notes due in 2019. The company has used some of these funds to purchase the 6.7% senior notes due in 2027.
ConAgra also announced it has increased by $300m the maximum amount of outstanding notes to be purchased in its offer for 7.875 % senior notes, due 2010, and 6.750 % senior notes, due in 2011. The company is now offering to purchase up to $609.34m of the 2010 notes and the 2011 notes.
“This is basically a refinancing – not really that different than what a consumer might do to refinance a home mortgage,” a spokesperson for ConAgra told just-food. “We have some outstanding debt that is coming due within the next couple years, and we are basically refinancing a significant portion of that debt at lower rates.”
While ConAgra is not releasing any information on the saving it expects the move to generate, the company hopes to reduce debt costs by taking advantage of declining interest rates, the spokesperson said.
“Interest rates right now are simply lower than they were even just one year ago. So we are capitalising on those lower rates,” the spokesperson concluded.
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