(Corrects to first-lien loan in sixth paragraph.)
Dole Food Co. (DOLE:US) and Pinnacle Foods Inc. (PF:US) are among companies obtaining financing for buyouts and acquisitions as businesses turn to the loan market to support their deals and refinance debt.
Dole, the fresh fruit and vegetable producer, obtained a $1.15 billion financing commitment for its buyout by Chief Executive Officer David Murdock, the Westlake Village, California-based company said today in a regulatory filing. First Quantum Minerals Ltd., the Canadian copper producer seeking to refinance $2.5 billion of borrowings, expects a “substantial portion” to come from bank debt.
“We are still seeing reasonable appetite in the bank market to take up this debt and it appears that the bond market is still strong,” Hannes Meyer, First Quantum’s (FM) chief financial officer, said in an e-mail.
Loan prices declined to 98.07 cents on the dollar today, after falling each of the past three weeks, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index.
Pinnacle Foods, the maker of Hungry Man dinners that’s majority-owned by Blackstone Group LP, obtained a $550 million term loan to support its purchase of Unilever’s Wish-Bone salad dressings business.
Spectrum Brands Holdings Inc., the maker of Kwikset locks and George Foreman grills, increased a four-year term loan it’s seeking to refinance bonds to $850 million, from an originally proposed $700 million, according to a person with knowledge of the transaction who asked not to be identified because terms are private. A six-year first-lien piece was decreased to $300 million from $400 million.
Continental Building Products LLC, a maker of materials used in residential and commercial construction, boosted the size of two loans that will back its buyout by Lone Star Funds, said a person with knowledge of the deal. The Reston, Virginia-based company’s first-lien loan was increased to $320 million from $300 million, while a second-lien portion was raised to $120 million from $100 million.
JPMorgan Chase & Co. more than doubled 2013 forecast for collateralized loan obligations in Europe to as much as 10 billion ($13 billion) euros, as the region’s economy probably recovered last quarter from its longest recession since the single currency union started 14 years ago.
European CLOs, which buy leveraged loans and package them into securities of varying risk and return, are on pace to pool the most since 35 billion euros in 2007. Globally, CLO managers have raised $59.1 billion this year.
Leveraged loans have junk category ratings of less than Baa3 by Moody’s Investors Service and below BBB- by S&P.
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