Wm. Wrigley Jr. Co., the maker of Juicy Fruit and Altoids acquired by Mars Inc., set the interest rate on $2.65 billion of loans it’s seeking to refinance debt.
A $2.15 billion, five-year term loan is being offered at 1.25 percentage points more than the London interbank offered rate, according to a person with knowledge of the deal, who asked not to be identified because the terms aren’t set. The credit facility includes a $500 million unsecured revolving line of credit, also due in 2018, the person said.
Proceeds of the loan, which is being arranged by Citigroup Inc., will be used to partially refinance short-term debt that prepaid the balance of $4.4 billion of Wrigley’s 11.45 percent subordinated notes due 2018, the person said. The debentures were held by Warren Buffett’s Berkshire Hathaway Inc. (A:US) after the billionaire helped finance Mars’s $23 billion takeover of Wrigley. Berkshire acquired the notes and provided $2.1 billion of equity with the preferred stock in 2008, according to a May 3 regulatory filing.
Wrigley, based in Chicago, is also selling $3 billion of bonds in a five-part offering, according to another person familiar with the deal. In a revolving line of credit, unlike a term loan, money can be borrowed again once it’s repaid.
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