Ferrara Candy firms discount on $425 million term loan B at 96½

By Sara Rosenberg

New York, June 8 - Ferrara Candy Co. Inc. set the original issue discount on its $425 million six-year covenant-light term loan B (B2/B) at 961/2, the mid point of revised talk of 96 to 97 and wide of initial talk of 98 to 99, according to a market source.

Pricing on the loan is Libor plus 625 basis points with a 1.25% Libor floor. The spread was flexed earlier from guidance of Libor plus 525 bps to 550 bps.

There is soft call protection of 102 in year one and 101 in year two.

Morgan Stanley Senior Funding Inc. and Goldman Sachs & Co. are the lead banks on the deal.

The company's $550 million credit facility also includes a $125 million asset-based revolver.

Proceeds will be used to fund the creation of the company through the merger of Round Lake, Minn.-based Farley's & Sathers Candy Co. Inc. and Forest Park, Ill.-based Ferrara Pan Candy Co. Inc.

Catterton Partners, which owns Farley's & Sathers, will remain as a majority investor in the combined company.

Closing is subject to applicable regulatory approval and satisfaction of other customary conditions.

Ferrara Candy is a general line candy manufacturer.

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