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United Agri Products to sell notes, Income Deposit Securities, obtain loan in recapitalization
New York, April 7 - United Agri Products plans a recapitalization in which it will sell new Income Deposit Securities, new senior subordinated notes and obtain a new $150 million senior secured second lien term loan facility.
Proceeds will be used to buy its $225 million 8¼% senior notes and $125 million principal amount 10¾% senior discount notes through tender offers, repurchase all its outstanding series A redeemable preferred stock from ConAgra Foods and repurchase some stock held by the equity sponsors and management.
The transactions were disclosed in an S-1 filing by parent company UAP Holding Corp. to register the Income Deposit Securities and additional senior subordinated notes that will be issued.
The IDS's are made up of class A common stock and senior subordinated notes which can be separated from 45 days after the offering.
In total, UAP aims to raise $625 million from the IDS and new note offerings. It did not specify sizes for the individual portions.
Bookrunners will be Credit Suisse First Boston, UBS Investment Bank and CIBC World Markets.
As part of the transaction, United Agri Products will amend its existing $500 million revolving credit facility. The existing facility matures on Nov. 24, 2008. The new $150 million second lien facility will have a seven-year maturity.
In addition to repurchasing stock, UAP will exchange any remaining stock for IDS's. Stock options will become vested and will also be exchanged.
If the tender for the notes is not completed, United Agri Products will exercise the equity clawback to buy up to 35% of the 8¼% notes and up to 40% of the 10¾% discount notes.
United Agri Products is a Greeley, Colo., distributor of crop protection chemicals, seeds and fertilizer.
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