JBS tweaks bond covenants, will reopen books Wednesday, might up size

By Paul A. Harris

St. Louis, April 21 - JBS USA, LLC and JBS USA Finance, Inc. will reopen the order books for their $400 million offering of five-year senior notes (B1//B+) on Wednesday following covenant changes introduced on Tuesday, according to an informed source.

There is good demand, but there was some pushback on the covenants, the source said, adding that with the tweaks there is possibly some room for the deal to be upsized.

The books had been scheduled to close at 2:30 p.m. ET on Tuesday.

On Monday the company set price talk at the 13% area, with an original issue discount of about 5 points.

The 13% yield talk is substantially lower than the 15% rate scenario that the company anticipated when it first launched the deal, according to a market source. However, the JBS Friboi existing bonds due 2011 and 2016, which trade predominantly in the emerging markets space, have tightened nearly 150 basis points since the new deal was announced, the source added.

J.P. Morgan Securities Inc. and Banc of America Securities LLC are joint bookrunners for the Rule 144A for life/Regulation S notes. ING, Rabobank, BMO Securities and Credit Suisse are co-managers.

The notes will be non-callable.

Proceeds will be used to repay inter-company debt and credit facilities and to fund general corporate purposes.

The prospective issuer is a Greeley, Colo., beef and pork processor.

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