Aurora Foods bank debt traded higher above par last week after the company announced that its restructuring efforts will ultimately include a combination with Pinnacle Foods Corp. The company's term loan debt was quoted in the 1007/8-1013/4 range, up from the 100-1003/4 context where the paper was quoted toward the end of last month, according to LoanX. The boost in trading levels comes from $15 million in fees slated to go to lenders to settle leverage and asset sale fee obligations under the company's credit facility, provided the bank debt lenders claims are paid in full by March 31. The fees will push the value of the bank debt up over the 102 level, explained a trader. There will be an increase in the leverage and asset sale fees under the credit to 51/4% of the aggregate amount outstanding on the credit if the bank debt has not been fully repaid by March 31.
"There are two things happening on a parallel basis," noted an Aurora spokesman, explaining the steps to combining Aurora and Pinnacle. J.P. Morgan Partners and C. Dean Metropoulos and Co. have invited J.W. Childs to invest in the entity that will acquire Pinnacle from Hicks, Muse, Tate & Furst. While the firms work to close the Pinnacle transaction, Aurora will continue to work with its creditors on its reorganization plan. After the Pinnacle acquisition is completed and Aurora's reorganization wraps up, the two businesses will be combined, he explained