Deutsche Bank is leading a $1.3 billion credit for Dole Foods. The deal is expected to comprise an $875 million covenant-light term loan; a $300 million ABL revolver and a $100 million letter of credit, according to one investor who covers the sector. Syndication of the deal launched last Thursday. Pricing on the term loan is LIBOR plus 2% and the revolver has pricing of LIBOR plus 1 1/2%. Bank of America and Scotia Capital are acting as joint bookrunners on the deal.
The credit will be used to pay off the company's debt, including a $1.15 billion deal Dole entered into in January 2003. A $1.05 billion facility launched last April that refinanced the original deal is also being paid down. Last year's deal provided Dole with a lower interest rate and paid off an $800 million term loan. "They can continue to pay down the debt from their going private. You could do a lot worse in the food and beverage sector; they are still a solid investment," the investor noted.
The 2003 financing was used to fund the $2.5 billion buyback of the remaining 76% of the company to allow Dole CEO David Murdock to take the business private. The previous deal was led by Deutsche Bank, B of A, FleetBoston Financial, Société Générale and Scotia Capital.
Based in Westlake Village, Calif., Dole Foods provides fresh fruits, vegetables and juice products. Bankers at B of A and Deutsche Bank, and a spokesman at Dole declined to comment.