Tyson gives details on $6.75 billion bridge loan, backstop revolver

By Angela McDaniels

Tacoma, Wash., June 4 - Tyson Foods, Inc. entered into a letter of commitment for a $6.75 billion 364-day senior bridge credit facility and a $1 billion 364-day senior backstop revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into the letter of commitment with Morgan Stanley Senior Funding, Inc. on May 29, and it added JPMorgan Chase Bank, NA to the commitment letter on Monday.

The company announced the letter of commitment on May 29 and released details about the bridge facility in the 8-K filing on Wednesday.

Tyson said the bridge facility is meant to finance its potential 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.

The backstop revolver is meant to replace Tyson's exiting revolving credit facility in the event that, prior to the closing date, the existing revolver is not amended to allow the consummation of the acquisition.

Among other conditions, Morgan Stanley's and JPMorgan's commitments are subject to pro forma compliance with a maximum debt to capitalization ratio of 0.6 to 1.0 and a minimum EBITDA to interest ratio of 3.75 to 1.00.

Tyson's obligations under the credit facilities will be guaranteed by Tyson Fresh Meats, Inc.

Tyson is offering $50 a share for Hillshire. The value of the transaction is $6.8 billion including Hillshire's net debt.

Tyson said its acquisition plans assume that Hillshire does not complete its proposed acquisition of Pinnacle Foods Inc.

Tyson processes and markets chicken and is based in Springdale, Ark. Hillshire is a Chicago-based convenient foods company.

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