Bank of America, J.P. Morgan, UBS Warburg, BMO Nesbitt Burns and Morgan Stanley have flexed down pricing on Del Monte's "B" piece to LIBOR plus 33/ 4% from LIBOR plus 4%. In addition, the banks have rolled a $300 million floating rate note into the $500 million "B" tranche, according to bankers familiar with the deal. There was word of investor grumbling about the consolidation of the two tranches because they initially liked the diversity offered with the "B" and note combination, said a banker. The note's spread was also a 1/4% higher than the "B" loan. The $1.4 billion debt package launched last month, with the "B" oversubscribing within days of launch. The "B" has since been twice oversubscribed. Bankers on the deal either declined to comment or did not return calls by press time.
The debt backs Del Monte's acquisition of Starkist, College Inn Broth and other businesses from H.J. Heinz. The credit facility also includes a $350 million revolver and a $250 million "A" term loan. A $300 million bridge-to-bond offering held by B of A and J.P. Morgan also backs the acquisition. The bonds hit the market last Thursday, and were slated to price between 81/ 2- 83/ 4%, said the banker. Thomas Gibbons, senior v.p. and treasurer return calls. A spokeswoman also did not return calls.