Del Monte Foods announced today (1 February) that its wholly-owned subsidiary Del Monte Corp. has completed its new US$1.1bn five-year senior secured credit facility.
The new credit facility matures in 2015 and consists of a $500m five-year revolving credit facility and a $600m five-year loan, replacing Del Monte’s prior $1.3bn senior secured credit facility.
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“This financing is another important step for Del Monte as we execute our strategic plan, positioning us to deliver top-tier performance. Our prudent focus on debt paydown, strong cash flow generation, and execution of our accelerated growth plan strategy enabled us to secure competitive rates,” said Richard Wolford, chairman and CEO of Del Monte Foods.
“Combined with the refinancing of the high yield notes we completed last fall, our resulting capital structure, extended maturity schedule and expanded revolver provide Del Monte with greater financial flexibility and positions us well as we look forward.”
Del Monte said that it is “pleased” with the pricing, five-year term and structural flexibility of the new facility, especially given the “challenging” economic environment.
The initial interest rate will be either LIBOR (Eurodollar) plus 275 basis points or Base Rate plus 175 basis points. After six months, the interest rate spreads have the potential to be below the initial spreads if Del Monte meets certain leverage thresholds.
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By GlobalDataDel Monte will use the revolving credit facility to fund its seasonal working capital needs and for other general corporate purposes, the company said.
