Tyson Foods, the US meat giant, has entered into a US$1bn credit facility with JPMorgan Chase Bank in order to pay down some of the company’s debt.
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The company also said yesterday (9 March) that it closed its previously announced $810m offering of senior notes at 10.5% that are due in 2014.
The new credit facility is secured by the company’s cash, accounts receivable and inventory and is guaranteed by all of the company’s domestic subsidiaries. It replaces the company’s previous revolving credit facility for which the company and certain of its material subsidiaries pledged substantially all their assets as collateral.
The new credit facility is scheduled to mature on 9 March 2012.
Tyson said it intends to use the proceeds from the note offering to repay borrowings and to repay or refinance other indebtedness and use for other general corporate purposes.
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By GlobalData“Given the current financial market, we believed it was prudent for us to proceed with these measures now,” said Dennis Leatherby, executive vice president and CFO for Tyson Foods.
“The offering and new credit facility provide Tyson with continued financial flexibility, giving us the option of paying off some existing debt early as well as funds for future financing needs.”
