Darling restates facilities, draws on revolver to fund acquisition

By Angela McDaniels

Tacoma, Wash., Jan. 10 - Darling International Inc. entered into an amended and restated credit agreement on Jan. 6 that provides for $2.65 billion of senior secured credit facilities, according to an 8-K filing with the Securities and Exchange Commission.

Those credit facilities include a new $1.3 billion seven-year term loan B as well as Darling's existing $350 million term loan A and its existing $1 billion five-year revolving loan facility.

On the closing date, $600 million of the term loan B was borrowed in dollars by Darling, and the euro equivalent of $700 million was borrowed in euros by Darling International NL Holdings BV.

The proceeds of the term loan B and a portion of the revolver were used to help fund the acquisition of the ingredients business of VION Holding NV.

Immediately following the closing, $441.57 million was outstanding under the revolver.

Darling International Canada Inc. is also a borrower under the credit agreement.

J.P. Morgan Securities LLC, Goldman Sachs Bank USA and Bank of Montreal are the bookrunners and lead arrangers for the term loan B. JPMorgan and Bank of Montreal are the bookrunners and lead arrangers for the term loan A and revolver.

JPMorgan Chase Bank, NA is the administrative agent.

Term loan B terms

The interest rate for the covenant-light term loan B is Libor plus 250 basis points for dollar loans and Euribor plus 275 bps for euro loans. The Libor floor is 0.75%.

The term loan B was initially talked at Libor plus 250 bps to 275 bps and Euribor plus 275 bps to 300 bps. Talk later firmed to Libor plus 250 bps and Euribor plus 275 bps.

In December, a market source said the original issue discount is 993/4, revised from 991/2, on the dollar portion and 99½ on the euro portion, and both have 101 soft call protection for six months.

The euro portion was upsized from $600 million.

The term loan B has amortization payments of 0.25% per quarter.

Other terms

The interest rate for the term loan A and revolver is Libor, the Euribor or CDOR, as applicable, plus 250 bps.

The maturity date is Sept. 27, 2018.

The term loan A has amortization payments of 1.25% per quarter for the first eight quarters, 1.875% for the ninth through 16th quarters and 3.75% after the 16th quarter.

About $250 million of the revolver is available for letters of credit, and $50 million is available for swingline loans.

Darling is an Irving, Texas-based provider of rendering, recycling and recovery solutions to the food industry. Vion Ingredients is a Son en Breugel, Netherlands-based developer and producer of specialty ingredients from animal origin for applications in pharmaceuticals, food, feed, pet food, fertilizer and bio-energy.

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