SMITHFIELD, VA. — Smithfield Foods Inc. is initiating an offering, subject to market and other conditions, of $500 million of senior secured notes due 2014. Proceeds from the notes offering will be used to repay certain indebtedness and for other general corporate purposes, the company stated.
The notes will be offered and sold to qualified institutional buyers in the U.S. pursuant to Rule 144A and outside the U.S. pursuant to Regulation S under the Securities Act of 1933. The notes will be guaranteed by substantially all of the U.S. subsidiaries of the company.
Smithfield has also started arranging a new $1 billion asset-based credit facility to replace the company's existing U.S. revolving credit facility -- and it will include an option, subject to certain conditions, to increase available commitments to $1.3 billion in the future. Similar to the notes, the new credit facility will be guaranteed by substantially all of the U.S. subsidiaries of the company.
The company also is negotiating a new $200 million term loan expected to mature in August 2013 to replace its existing $200 million term loan that matures in August 2011. The new term loan would be guaranteed and secured on the same basis as the new senior secured notes.
The sale of the notes and closing of the new credit facility and new term loan are expected to be consummated in early July 2009, subject to market and other customary conditions.
The notes have not been registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the U.S. absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state laws.