Froneri cuts spread on second-lien debt to Libor/Euribor plus 575 bps

By Sara Rosenberg

New York, Jan. 28 – Froneri International Ltd. reduced pricing on its $245 million eight-year covenant-lite second-lien term loan (B3/B-) and on its €245 million eight-year covenant-lite second-lien term loan (B3/B-) to Libor/Euribor plus 575 basis points from revised talk of Libor/Euribor plus 600 bps, and initial talk of Libor plus 700 bps on the U.S. loan and a range of Euribor plus 700 bps to 725 bps on the euro loan, according to a market source.

In addition, the issue price on the euro second-lien term loan was changed to par from revised talk of 99.75 and initial talk of 99. The original issue discount on the U.S. second-lien term loan remained at 99.75 but was changed previously in syndication from original talk of 99.

The second-lien term loans still have a 0% floor and call protection of 102 in year one and 101 in year two.

The company also firmed pricing on its €2.18 billion seven-year covenant-lite first-lien term loan (B1/B+) at Euribor plus 262.5 bps, the low end of revised talk of Euribor plus 262.5 bps to 275 bps and down from initial talk in the range of Euribor plus 300 bps to 325 bps, the source said.

As before, the euro first-lien term loan has a 0% floor and a par issue price.

The company’s $2.67 billion seven-year covenant-lite first-lien term loan (B1/B+) remained priced at Libor plus 225 bps with a 0% Libor floor and an original issue discount of 99.75.

The first-lien term loans still have 101 soft call protection for six months.

Froneri’s credit facilities also include a €600 million multi-currency 6.5-year revolver (B1/B+) priced at Euribor plus 275 bps with a 0% floor.

Earlier in syndication, the U.S. first-lien term loan was upsized from a revised amount of $2.16 billion and an initial amount of $1.68 billion, the euro first-lien term loan was downsized from €2.3 billion, the U.S. second-lien term loan was downsized from $355 million, the euro second-lien term loan was downsized from €430 million and a £415 million seven-year covenant-lite first-lien term loan was eliminated.

Furthermore, previously in syndication, pricing on the U.S. first-lien term loan was lowered from Libor plus 300 bps and the discount was tightened from 99.5, and the issue price on the euro first-lien term loan was modified from 99.5.

Credit Suisse is the sole 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.

Commitments for the U.S. debt were scheduled to be due at 5 p.m. ET on Tuesday, and commitments for the euro debt are due at 7 a.m. ET on Wednesday.

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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