Post Holdings launches $635 million term loan at Libor plus 325 bps

By Sara Rosenberg

New York, May 15 - Post Holdings Inc. launched on Thursday its $635 million seven-year senior secured term loan with price talk of Libor plus 325 basis points with a 1% Libor floor and an original issue discount of 991/2, according to a market source.

The term loan has 101 soft call protection for six months, the source said.

Financial covenants include a maximum senior secured leverage ratio and a maximum consolidated interest coverage ratio.

Commitments are due on May 28, the source added.

Barclays, Credit Suisse Securities (USA) LLC, Wells Fargo Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets and Nomura are the bookrunners on the deal.

Senior secured leverage is 1.1 times and net total leverage is 6.2 times.

Proceeds will be used to help fund the acquisition of Michael Foods from GS Capital Partners, Thomas H. Lee Partners and other owners for $2.45 billion on a cash-free, debt-free basis, subject to working capital and other adjustments. In addition, Post will make a payment of $50 million on the first anniversary of the closing date.

Based on recent filings with the Securities and Exchange Commission, other funds for the acquisition are expected come from about $630 million of newly issued senior unsecured debt securities and around $500 million of newly issued common and/or equity-linked securities.

Closing is expected in the second quarter, subject to conditions, including the expiration of waiting periods required under antitrust laws.

Post is a St. Louis-based consumer packaged goods holding company. Michael Foods is a Minnetonka, Minn.-based producer and distributor of food products to the foodservice, retail and food-ingredient markets.

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