Dean Foods tenders, seeks consents for $400 million of 9¾%, 7% notes

By Susanna Moon

Chicago, Nov. 12 - Dean Foods Co. said it began cash tender offers and a consent solicitation for up to $400 million principal amount of its $400 million 9¾% senior notes due 2018 and its $500 million 7% senior notes due 2016.

Pricing for each $1,000 principal amount will be set at 2 p.m. ET on Nov. 25 using a reference security plus a fixed spread as follows, with the notes listed in order of priority acceptance level:

• The 9¾% notes will be priced using the 0.25% U.S. Treasury notes due Dec. 15, 2014 plus 50 basis points for a hypothetical purchase price of $1,143.61; and

• The 7% notes will be based on the 1.75% U.S. Treasury notes due May 31, 2016 plus 115 bps for a hypothetical purchase price of $1,131.87.

The hypothetical purchase price is based on a reference yield of 0.16% for the 9¾% notes and 0.475% for the 7% notes as of 2 p.m. ET on Nov. 8.

The total purchase price will include an early tender premium of $30.00 per $1,000 par amount of notes tendered by 5 p.m. ET on Nov. 25, the early tender date.

Holders who tender their notes and deliver their consents after the early tender deadline will receive the total payment less the early tender premium.

The offers will end at 11:59 p.m. ET on Dec. 10, with settlement on Nov. 26 for early tendered notes.

The company also will pay accrued interest to but excluding the settlement date.

Dean Foods also began a consent solicitation to amend the 9¾% notes to eliminate substantially all of the restrictive covenants and events of default, according to a company press release.

Holders who tender their notes will be deemed to have delivered their consents. Consents are needed for at least a majority of the outstanding notes to approve the proposed amendments. Holders may not tender their notes without delivering consents or vice versa.

Tendered notes may be withdrawn by the early deadline.

BofA Merrill Lynch (888 292-0070 or 980 387-3907 collect) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 470-3800 or 212 430-3774 collect) is the information agent.

Dean Foods is a Dallas-based food and beverage company.

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