Froneri ups dollar-denominated first-lien tranche on €5.7 billion equivalent multi-currency loan

By Paul A. Harris

Portland, Ore., Jan. 27 – Froneri International Ltd. upsized the dollar-denominated tranche of its multi-currency term loan to $2.67 billion from $2.16 billion, according to a market source.

Along with the upsize, a downsized £390 million tranche is eliminated.

The revisions are leverage neutral, the source said.

Apart from those changes, details on the €5.7 billion equivalent seven-year covenant-lite first-lien tranches (B1/B+) remain unchanged.

As reported:

• Spread talk on the upsized $2.67 billon tranche tightens to 225 basis points over Libor from 300 bps. Price talk increases to 99.75 from 99.5. The tranche is upsized from $2.16 billion, after previously having been upsized from $1.68 billion; and

• Spread talk on a previously downsized €2.18 billion tranche was tightened to 262.5 bps to 275 bps over Euribor from 300 bps to 325 bps. Price talk increased to par from 99.5. The tranche size was decreased from €2.3 billion;

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 previously downsized €245 million tranche decreased to Euribor plus 600 bps from Euribor plus 700 bps to 725 bps. Price talk increased to 99.75 from 99. The tranche size decreased from €430 million; and

• Spread talk on a previously downsized $245 million tranche tightened to Libor plus 600 bps from Libor plus 700 bps. Price talk increased 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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