Froneri details terms, updates pricing on €5.7 billion equivalent multi-currency loan offers

By Paul A. Harris

Portland, Ore., Jan. 24 – Froneri International Ltd. released details and updated pricing on its €5.7 billion equivalent package of loans, according to a market source.

Details on the seven-year covenant-lite first-lien tranches (B1/B+) are as follows:

• Spread talk on a downsized €2.18 billion tranche tightens to 262.5 basis points to 275 bps over Euribor from 300 bps to 325 bps. Price talk increases to par from 99.5. The tranche size is decreased from €2.3 billion;

• Spread talk on an upsized $2.16 billion tranche tightens to 225 bps over Libor from 300 bps. Price talk increases to 99.75 from 99.5. The tranche is upsized from $1.68 billion;

• Price talk on a downsized £390 million seven-year covenant-lite first-lien loan (B1/B+) is unchanged at 99. The tranche is downsized from £415 million.

The first-lien tranches come with six months of soft call protection at 101.

Details on the second-lien covenant-lite eight-year tranches (B3/B-) are as follows:

• Spread talk on a downsized €245 million tranche decreases to Euribor plus 600 bps from Euribor plus 700 bps to 725 bps. Price talk increases to 99.75 from 99. The tranche size decreased from €430 million;

• Spread talk on a downsized $245 million tranche tightens to Libor plus 600 bps from Libor plus 700 bps. Price talk increases to 99.75 from 99. The tranche size decreased from $355 million.

The second-lien tranches feature hard calls of 102 in year one, and 101 in year two.

Commitments are due Tuesday on the dollar-denominated first- and second-lien tranches. Books had previously been scheduled to remain open until Wednesday.

Commitments on the euro- and sterling-denominated tranches are due on Wednesday.

The loans also include a €600 million equivalent multi-currency 6.5-year revolver (B1/B+).

Credit Suisse is the U.S. physical bookrunner, and Credit Suisse and Goldman Sachs are the European physical bookrunners. BofA Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC and J.P. Morgan Securities LLC are joint bookrunners. Credit Suisse is the agent.

Proceeds will be used to fund the acquisition of Nestle USA’s ice cream business for $4 billion, to refinance existing debt and for general corporate purposes.

Closing is expected this quarter, subject to customary regulatory approvals.

Froneri, a joint venture between PAI Partners and Nestle, is a U.K.-based ice cream manufacturer.

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