Bloomberg News

B&G Foods Said to Cut Rate on Reduced $225 Million Term Loan B

November 17, 2011

Nov. 16 (Bloomberg) -- B&G Foods Inc. shifted funds and decreased the rate it will pay on a portion of its $575 million financing supporting its purchase of Culver Specialty Brands from Unilever Plc., according to a person with knowledge of the matter.

The maker of Cream of Wheat cereal and Ortega tacos, decreased a $300 million term loan B to $225 million and reduced the rate it will pay on the seven-year debt by 0.5 percentage point, to 3.5 percentage points more than the London interbank offered rate, said the person, who declined to be identified because the deal’s private. Libor will have a 1 percent minimum, compared with 1.25 percent initially proposed.

B&G, based in Parsippany, New Jersey, will sell the debt at 99 cents on the dollar, compared with 98 cents originally offered, the person said.

The company increased the size of a five-year term loan A to $150 million from $100 million and a boosted a revolving line of credit, also due in five years, to $200 million, from $100 million, the person said. The debt pays three percentage points more than Libor, which is unchanged.

Lenders must let Credit Suisse Group Inc., the bank arranging the transaction, know by noon tomorrow whether they will participate in the deal, the person said.

B&G agreed to buy Culver from Unilever for $325 million in cash, giving it brands such as Mrs. Dash, Static Guard and Molly McButter, according to an Oct. 28 statement from Unilever.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks.

In a revolving credit facility, money can be borrowed again once it’s repaid; in a term loan, it can’t.

--Editors: Chapin Wright, Faris Khan

BGS US <EQUITY> CN

To contact the reporters on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net; Michael Amato in New York at mamato3@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.


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