Smithfield completes $1 billion asset-based revolver via five banks

By Sara Rosenberg

New York, July 2 - Smithfield Foods Inc. closed on its new $1 billion asset-based revolving credit facility due July 2, 2012, according to a news release.

JPMorgan, Barclays, Morgan Stanley, Rabobank and GE Capital acted as the bookrunners and co-lead arrangers on the deal, with JPMorgan the left lead and administrative agent.

The revolver is priced at Libor plus 425 basis points with a 100 bps unused fee.

There is a $300 million accordion feature.

Covenants include a minimum fixed-charge coverage ratio of 1.1 to 1.0 that is only applicable when availability under the revolver is less than the greater of 15% of the commitments under the facility and $120 million.

Proceeds from the revolver, along with proceeds from a $625 million senior secured notes offering, were used to replace and repay borrowings under the company's previous revolver. The notes will also be used to repay and/or refinance other debt and for other general corporate purposes.

In addition, the company negotiated the extension of the maturity on its $200 million term loan to August 2013 from August 2011 in return for higher pricing. This loan is held by Rabobank and is not a syndicated deal.

Smithfield Foods is a Smithfield, Va., pork processor and hog producer.

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