Tyson amends credit facility, boosting bridge loan to $8.2 billion

By Toni Weeks

San Luis Obispo, Calif., June 10 – Tyson Foods, Inc. again amended and restated the commitment letter for its 364-day senior unsecured bridge credit facility and 364-day senior unsecured backstop revolving credit facility, this time to increase the bridge facility to $8.2 billion from $6.75 billion.

The $1 billion revolver is being maintained at the current level.

The company also removed some conditions to the arrangers’ commitment to provide the credit facilities, according to an 8-K filing with the Securities and Exchange Commission.

Tyson entered into a letter of commitment with Morgan Stanley Senior Funding, Inc. on May 29 and then amended and restated it on June 2 to add JPMorgan Chase Bank, NA as a second arranger.

Tyson said in the filing that 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.

As previously noted, 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.

The company 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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