Deutsche Bank altered the terms and cut pricing on the financing for Dole Foods at the end of last week. The asset-based revolver was upsized by $25 million to $350 million and pricing remained at LIBOR plus 1 1/4%. The term loan was increased by $100 million to $1.075 million and pricing flexed down 25 basis points to LIBOR plus 1 3/4%. The term loan is covenant-lite, much to the dismay of some investors.
"The Dole performance is soft, the security package for the term loan got weaker and they took away covenants. Pricing was talked at 200-250 and now it is 175," said one investor. "We have not recommitted at this level and I'm going to be pounding the table to not do this deal. One-seventy-five with no covenants, just forget about it."
Still, the deal seems to be moving along just fine. "It is aggressive, but it's going well. It's a hot market," one banker said. A portfolio manager agreed. "It is such a well loved name," he said. "Even though it is aggressive, it is a blowout; people can't help themselves but do it." Bank of America and Scotia Capital are joint bookrunners on the deal. A Dole official did not return a call by press time.