Daily News: February 20, 2014

Diamond Foods Completes Refinancing of Debt Structure

Diamond Foods announced the closing of a $125 million syndicated secured credit facility pursuant to an asset-based credit agreement. Wells Fargo Bank acted as as administrative agent, swing line lender, syndication agent, sole lead arranger and sole bookrunner. SunTrust Bank acted as documentation agent. The ABL credit facility has a four-and-a-half-year term, during which the company may make aggregate drawings not to exceed the lesser of $125 million and an amount equal to the borrowing base specified in the ABL credit facility. The company has a $20 million sublimit for the issuance of letters of credit, and a swing line facility of up to $12.5 million for same day borrowings. Proceeds were used to refinance certain indebtedness of the company, and may be used to finance the ongoing general corporate needs of the company and its subsidiaries.

In addition, the company entered into a $415 million four-and-a-half-year syndicated secured credit facility pursuant to a term credit agreement with Credit Suisse-AG Cayman Islands Branch, as administrative agent and collateral agent; Credit Suisse Securities (USA), Wells Fargo Securities, Barclays Bank PLC, BMO Capital Markets and SunTrust Robinson Humphrey, as joint lead arrangers and joint bookrunners. Wells Fargo Bank, Barclays Bank PLC, Bank of Montreal and SunTrust Bank acted as co-documentation agents. Under the term credit facility, the company made a single drawing of $415 million on the closing date. The company may request an additional term loan of up to $100 million, plus an unlimited amount under certain terms and conditions set forth.

Diamond Foods also announced it completed the refinancing of its debt capital structure, as previously announced. The company closed its previously announced Rule 144A offering of $230 million in aggregate principal amount of 7.000% senior notes due 2019. Credit Suisse Securities (USA), Wells Fargo Bank, Barclays Capital, BMO Capital Markets and SunTrust Robinson Humphrey acted as initial purchasers of the notes. Proceeds will be used to prepay outstanding indebtedness under the company’s existing credit facility and to redeem its senior unsecured notes due 2020 held by Oaktree, including a prepayment premium.

The ABL facility and term credit facility replace the credit agreement dated February 25, 2010 with Bank of America, as administrative agent, and other agents and lenders party thereto, which terminated on February 19, 2014.

“We are pleased with our new debt structure,” said Raymond Silcock, Diamond’s CFO. “In addition to substantially reducing interest expense, it will also provide us financial flexibility for the future.”

Diamond Foods is a packaged food company focused on building and energizing brands including Kettle Chips, Emerald snack nuts, Pop Secret popcorn and Diamond of California nuts.