Permira to refinance Birds Eye loan

April 7, 2011 14:35

Private equity firm Permira is refinancing part of the 1.5 billion euro ($2.1 billion) in loans used to back its 2006 buyout of frozen foods company Birds Eye Iglo, market sources said on Wednesday, reports with reference to London South East.

Permira is exploiting favourable market conditions to reprice loans behind the Birds Eye Iglo business, which is one of Europe's largest frozen food producers with a product line-up best known for fish fingers and peas.

The refinancing includes syndication of a new 375 million pound ($613.1 million) five-year term loan E, paying interest of 462.5 basis points over LIBOR. Credit Suisse and Deutsche Bank are lead arrangers on the new loan.

Proceeds on the term loan E will be used to repay the company's 275 million euro senior mezzanine loans and 150 million junior mezzanine loans, which were put in place in 2006 along with other senior loans, the sources said.

In addition, the refinancing involves a repricing of the interest margin on a 500 million euro loan put in place last year to back Permira's acquisition of Findus Italy, which was merged with Iglo, the sources said. The margins will be reduced to 450 basis points from 475 basis points over EURIBOR, a banker told Thomson Reuters LPC.

Permira declined to comment.

Last month, French convenience foods company Picard Surgeles became the first pure European private equity-owned firm to kick off a repricing on its loans. It reduced the margin to 400 basis points from 450-500 basis points, taking advantage of excess liquidity in the leveraged loan market.

Permira bought Birds Eye from Unilever in November 2006 for 1.76 billion euros. The deal was backed with a 1.5 billion euro buyout financing arranged by Calyon, Credit Suisse, Goldman Sachs and Lehman Brothers.

At the time, the loans included a 100 million euro junior payment-in-kind facility, where the interest accrues, a 275 million euro junior mezzanine facility and a 72.5 million junior second-lien facility. The second-lien facility was previously repaid, said the banker. The senior loans totaled 1.02 billion euros, according to Thomson Reuters LPC data.

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