Appetite for Suiza Foods' bank debt continues as "B" paper traded in the 1003/ 4 range last week. Dealers noted that Suiza is buying Dean Foods, which carries some acquisition risk. "Small-scale grocers have gone bankrupt after making an acquisition, but Suiza has done well at making successful integration," said a trader. Dealers noted that the food industry remains one of the most stable, and in a market wary of telecom, Suiza is especially appetizing. The dairy company is based in Dallas.
The company has a $2.7 billion deal led by Bank One and First Union. In a default-wary market, Suiza's deal got a strong reception in syndication and was touted for strong cash flow, ratings and pricing (LMW, 4/22). The company's $750 million term loan "B" is priced as LIBOR plus 3%.