Dole Food expected to sell up to $500 million notes to refinance debt

By Paul A. Harris

St. Louis, Feb. 5 - Dole Food Co. Inc. is expected to bring a $500 million maximum offering of high-yield notes, according to market sources, who cited an 8-K document that the company filed on Thursday with the Securities and Exchange Commission.

Proceeds are expected to help refinance $345 million of 8 5/8% notes due 2009 and $400 million of 7¼% notes due 2010.

Dole disclosed plans for the issuance when it announced that it has launched an amendment to its senior secured credit facility that would allow for the issuance of notes secured by junior liens on certain U.S. assets.

The amendment would permit the company to sell the greater of $500 million of new notes or an amount that, when added to the outstanding senior secured debt, equals 3.75 times the last 12 months EBITDA.

In addition, the amendment would add a senior-lien leverage ratio covenant and increase pricing.

Furthermore, the amendment would allow the company to provide for up to €45 million of the European Commission's competition decision requirements without using the existing debt basket capacity.

Deutsche Bank is leading the amendment, a market source told Prospect News.

Dole is a Westlake Village, Calif.-based producer and marketer of high-quality fresh fruit and fresh vegetables.

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