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Shearer’s Foods flexes $1.22 billion term loan to SOFR plus 400 bps
By Sara Rosenberg
New York, Jan. 31 – Shearer’s Foods (Fiesta Purchaser Inc.) reduced pricing on its $1.22 billion seven-year covenant-lite term loan B (B3/B) to SOFR plus 400 basis points from talk in the range of SOFR plus 425 bps to 450 bps, according to a market source.
Also, the company removed from the term loan the 25 bps pricing step-downs at 5x and 4.5x first-lien leverage so that there are no longer any step-downs, and tightened the original issue discount to 99 from 98, the source said.
Furthermore, J Crew, Chewy and Serta protection provisions were added, the earlier maturity date debt basket was changed to the greater of $315 million/100% of EBITDA from the greater of $630 million/200% of EBITDA, and quarterly management discussion and analysis was added.
The term loan still has a 0% floor and 101 soft call protection for six months.
Deutsche Bank Securities Inc., UBS Investment Bank, Blue Owl, BMO Capital Markets Corp., BNP Paribas Securities Corp., RBC Capital Markets LLC, TD Securities (USA) LLC, Goldman Sachs Bank USA, Rabobank, Citizens, Macquarie Capital (USA) Inc., Mizuho, Natixis and Stifel are the bookrunners on the deal. Deutsche is the administrative agent.
Commitments were scheduled to be due at 1 p.m. ET on Wednesday, accelerated from 5 p.m. ET on Wednesday, the source added.
Proceeds will be used with $500 million of senior secured notes to help fund the buyout of the company by Clayton Dubilier & Rice from Ontario Teachers’ Pension Plan Board.
Shearer’s Foods is a Massillon, Ohio-based contract manufacturer and private label supplier serving the snack industry.
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