Reynolds American gets $750 million unsecured delayed-draw loan

By Sara Rosenberg

New York, Feb. 27 - Reynolds American Inc. closed on a new $750 million unsecured delayed-draw term loan due Dec. 28, 2012, according to an 8-K filed with the Securities and Exchange Commission on Monday.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Fifth Third Bank, Mizuho Corporate Bank Ltd., RBC Capital Markets and Scotia Capital (USA) Inc. acted as the joint lead arrangers and bookrunners on the deal that was completed on Feb. 24.

The loan is available for drawing until April 17.

Pricing can range from Libor plus 125 basis points to 250 bps based on debt ratings, and there is a 22.5 bps facility fee.

Financial covenants require a consolidated leverage ratio of 3.00 to 1.00 and a consolidated interest coverage ratio of 4.00 to 1.00.

Proceeds will be used for general corporate purposes, which may include helping pay debt securities that mature in 2012, making payments under a master settlement agreement with various states resolving state health-care cost claims and/or purchasing shares.

Reynolds American is a Winston-Salem, N.C.-based manufacturer and seller of cigarette and other tobacco products.

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