Smithfield Foods Inc. (SFD: Quote) announced that it has priced its underwritten public offering of $1 billion aggregate principal amount of senior notes due 2022. The notes will bear interest at 6.625% per year. Interest on the notes is payable on August 15 and February 15 of each year, beginning February 15, 2013. The notes will mature on August 15, 2022.
The closing of the offering is expected to occur on August 1, 2012, subject to customary closing conditions.
The company estimates that the net proceeds of this offering will be approximately $977.8 million, after deducting the underwriting discounts and commissions and estimated offering expenses.
The company said it intends to use the net proceeds of this offering to finance a tender offer to repurchase its outstanding 10% Senior Secured Notes due 2014 and 7.75% Senior Notes due 2013, including the payment of all accrued and unpaid interest payable and any applicable premium with respect to the notes purchased in the tender offer, as well as any related fees and expenses.
This refinancing will reduce interest expense and, upon the repayment in full of all of the 10% Senior Secured Notes due 2014, any collateral currently securing such notes on a first-priority basis will be released, the company said.
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by RTT Staff Writer
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