Smithfield Foods has announced the pricing of a US$625m offering of senior secured notes due July 2014.
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The notes will have an interest rate of 10% a year and will be issued at a price equal to 96.201% of their face value.
The company said it intends to use the proceeds from the notes offering to repay borrowings and terminate commitments under its existing US revolving credit facility, repay and/or refinance other indebtedness and for other general corporate purposes.
The notes will be offered and sold to qualified institutional buyers in the US.
The notes will be guaranteed by substantially all of the US subsidiaries of the company.
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By GlobalDataThe sale of the notes is expected to be consummated in early July 2009, subject to market and other conditions, including the consummation of a new $1 billion asset-based credit facility and a new $200.0 million term loan.
The new credit facility will replace the company’s existing US revolving credit facility and will include an option, subject to certain conditions, to increase available commitments to $1.3 billion in the future.
Similar to the notes, the new credit facility will be guaranteed by substantially all of the US subsidiaries of the company.
Smithfield also said it is negotiating a new $200m term loan expected to mature in August 2013 to replace its existing $200m term loan that matures in August 2011. The new term loan would be guaranteed and secured on the same basis as the new senior secured notes.
