Hostess to launch roughly $1.3 billion credit facility on Thursday

By Sara Rosenberg

New York, July 14 – Hostess is scheduled to hold a bank meeting at 2 p.m. ET in New York on Thursday to launch a $1,325,000,000 credit facility, according to a market source.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., UBS AG, Morgan Stanley Senior Funding Inc., RBC Capital Markets and Nomura are the leads on the deal.

The facility consists of a $100 million revolver, an $825 million seven-year first-lien covenant-light term loan and a $400 million eight-year second-lien covenant-light term loan, the source said.

Both term loans have a 1% Libor floor.

The first-lien term loan has 101 soft call protection for six months, and the second-lien term loan has call protection of 102 in year one and 101 in year two, the source continued.

Proceeds will be used to refinance existing debt and fund a shareholder dividend.

Commitments are due at 5 p.m. ET on July 30, the source added.

Hostess is a sweet baked goods company.

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