Pinnacle Foods completed the refinancing of its senior secured credit facilities in a significantly oversubscribed transaction. The refinancing consisted of a new $800 million term loan A, a new $1.239 million term loan B and an upsize of the company’s revolving credit facility from $225 million to $300 million.
Bank of America Merrill Lynch and Barclays Bank acted as lead arrangers for the refinancing, with Goldman Sachs, Credit Suisse and Morgan Stanley acting as additional arrangers for the term loan B.
Term loan A will mature in March 2023 with an initial price at LIBOR +162.5 basis points (with 0% LIBOR floor). Term loan B will mature in February 2024 with a pricing at LIBOR +175 basis points (with 0% LIBOR floor) versus the previous term loan B that was priced at LIBOR +200 (with a 0% LIBOR floor). The company used $204 million of cash on hand to pay-down the prior term loan, which had an outstanding balance of $2.239 million immediately prior to the refinancing, and to pay approximately $4 million of fees and expenses associated with the refinancing.
The refinancing strengthens the company’s overall financial profile and will help to offset the anticipated rising interest rate environment in 2018 and beyond.
“We are very pleased with the execution of this refinancing and the continued support that we receive from the banking community,” Pinnacle Executive Vice President and CFO Craig Steeneck said. “Net of the swaps we have put in place, we expect this refinancing to result in cash interest savings of approximately $50 million over the remaining life of the loans. This transaction, which was incorporated in the 2018 guidance we provided earlier this month, further enhances our already strong financial profile and allows us to continue to execute on value-creating opportunities.”
Pinnacle Foods is a manufacturer, marketer and distributor of branded food products with a portfolio that includes brands such as Birds Eye, Duncan Hines, Earth Balance, EVOL, Hungry-Man, Log Cabin, Vlasic and Wish-Bone, among others.