Del Monte downsizes bonds to $1.3 billion, ups bank loan, sets talk

By Paul A. Harris

Portland, Ore., Jan. 31 - Sponsors downsized the bond portion of the Del Monte Foods Co. leveraged buyout debt financing to $1.3 billion from $1.5 billion on Monday, according to informed sources.

The eight-year senior notes (B3/B-) are talked with a 7¾% yield and are set to price on Tuesday morning, sources added.

The joint physical bookrunners are Bank of America Merrill Lynch, which will bill and deliver, and Morgan Stanley & Co. Inc.

Barclays Capital Inc. and J.P. Morgan Securities LLC are the joint passive bookrunners.

KKR Capital Markets is the lead manager.

Deutsche Bank Securities Inc., Goldman Sachs & Co. and Mizuho are the co-managers.

The issuing entity is Blue Merger Sub Inc., which will be merged with and into Del Monte.

The notes become callable in three years at par plus one-half the coupon. The notes also come with a 101% poison put.

Proceeds will be used to fund the leveraged buyout of Del Monte by Kohlberg Kravis Roberts & Co. LP, Vestar Capital Partners and Centerview Partners.

Concurrently with the downsizing of the bond deal, the Del Monte bank loan was upsized by $200 million, increasing to $2.7 billion from $2.5 billion.

Del Monte is a San Francisco-based branded pet and consumer products company.

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