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Tyson Foods gets $5.7 billion bridge loan for Hillshire acquisition
By Angela McDaniels
Tacoma, Wash., July 16 – Tyson Foods, Inc. entered into a $5.7 billion 346-day bridge loan on Tuesday, according to a schedule TO filing with the Securities and Exchange Commission.
The bridge facility is meant to finance the company’s planned acquisition of Hillshire Brands Co. to the extent that it does not issue unsecured debt, term loans, equity, equity-linked securities or other securities to finance the acquisition.
Morgan Stanley Senior Funding, Inc. and J.P. Morgan Securities LLC are the joint lead arrangers and joint bookrunners. Morgan Stanley is the administrative agent, and JPMorgan Chase Bank is the syndication agent.
The interest rate is Libor plus a margin that ranges from 125 basis points to 250 bps for the first 89 days after the initial closing date. For days 90 through 179, the margin ranges from 150 bps to 275 bps; for days 180 to 269, it ranges from 175 bps to 325 bps; and from day 270 onward, it ranges from 225 bps to 375 bps.
The commitment fee is either 17.5 bps or 25 bps.
The company must pay a duration fee of either 50 bps to 75 bps 90 days after the initial closing date, either 75 bps or 100 bps 180 days after closing and either 100 bps or 150 bps 270 days after closing.
The exact interest rate and fees depend on the company’s debt ratings.
The company entered into a commitment letter for a $6.75 billion bridge loan on May 29 and increased that commitment amount to $8.2 billion on June 10.
In addition to the bridge loan, the company entered into a $1,306,250,000 three-year term loan, a $593.75 million five-year term loan A and a $600 million five-year term loan B on Tuesday.
Tyson is offering $63 per Hillshire share. The tender offer for the shares will end Aug. 12.
Tyson processes and markets chicken and is based in Springdale, Ark. Hillshire is a Chicago-based convenient foods company.
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