Landec, a provider of diversified health and wellness solutions within the packaged food and biomaterial markets, completed a new syndicated credit facility with JPMorgan Chase, BMO Harris Bank and City National Bank, a subsidiary of Royal Bank of Canada.

The $150 million facility provides a lower interest expense and increased financial flexibility in support of Landec’s five-year growth plan. Landec plans to use these funds to expand its existing operations and fuel its internal innovation initiatives.

The syndicate is being jointly led by JPMorgan Chase and BMO Harris, each committing $62.5 million. City National committed $25 million, for a total credit facility of $150 million, consisting of a $50 million term loan that refinanced existing debt and a $100 million revolving credit facility.

The $50 million term loan has a five-year term with a 10-year amortization and no prepayment penalties. Interest expense over the next 12 months is projected to decrease by approximately $400,000 compared to the interest expense the company would have incurred on the previous loans that were refinanced. The interest rate is based on Landec’s leverage ratio and can range from LIBOR+1.25% to 2.25%. The spread at close was 1.75% for an initial interest rate of approximately 2.30%. This initial interest rate is approximately 115 basis points lower than the average interest rate the company was paying on the refinanced debt.

Greg Skinner, Landec’s vice president of Finance and CFO, said, “The current banking environment is very favorable to growing, profitable, and well capitalized companies like Landec and we are pleased to secure debt financing from this syndicate of three leading and highly regarded banks, JPMorgan Chase, BMO Harris and City National. We look forward to growing our business relationship with all of the banks in this syndicate.”