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Heinz LBO Loan Cov Lite; Banks Join

  • Dollar and euro/sterling tranches
  • Berkshire, 3G Capital in buyout deal
  • $28B deal largest in food industry

JPMorgan Chase and Wells Fargo committed to provide a total $14.1 billion of new debt and a number of banks, including Barclays and Citigroup, are now joining the deal on a sub-underwriting basis.

A $2.1 billion second-lien term loan which is a component of the buyout debt has launched for general syndication. The rest of the new debt is due to launch for syndication in March. In addition to the second lien, as previously reported, the new loans will comprise $8.5 billion in U.S. dollar-denominated term loan B1 and B2 facilities, $2 billion in euro/pound-sterling denominated term loan B1 and B2 facilities and a $1.5 billion revolving credit facility.

Heinz also plans to roll over some existing debt that is not covered under change of control provisions for accelerated repayment. Warren Buffett’s Berkshire Hathaway and 3G Capital will buy Heinz for $72.50 a share, or $23.2 billion in cash. Including debt assumption, Heinz valued the deal at $28 billion, which it called the largest in food industry history.

Claire Ruckin and Isabell Witt are correspondents for Thomson Reuters LPC in London. Tessa Walsh is loans editor at Thomson Reuters International Financing Review.