PRESS DIGEST- Financial Times - May 30
May 30 The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.
NEW YORK May 10 A US$3bn loan backing the US$7.2bn takeover of bakery chain Panera Bread Co by JAB Holding Co, owned by Germany's billionaire Reimann family, is being arranged by a bank group led by JP Morgan and meeting solid demand, several bankers said.
JAB, which last year bought coffee maker Keurig Green Mountain Inc and breakfast sweets specialist Krispy Kreme Doughnuts, announced the deal with Panera on April 5.
“JAB owns coffee, donuts, bagels and now is expanding into lunch by buying Panera Bread,” a banker said.
The pro rata financing includes a US$2.25bn term loan A and a US$750m revolving credit facility.
The loans have already been syndicated successfully to the top-tier banks, another banker said. The deal included nine banks with three top leads. The debt will later be more broadly syndicated, though some banks are expected to keep their pieces.
“A lot of those banks will want to hold it,” said a third banker. “There’s a big appetite for regional and foreign banks to own those assets as almost a strategy and they get ancillary capital markets business as a result.”
Pricing on the debt will be tied to a leverage-based grid and opens at 200bp over Libor, the second banker said.
Pro rata deals are typically sold to banks as opposed to the broader institutional market and include more stringent terms than term loan Bs.
Term loan As generally have shorter maturities than term loan Bs and amortize more quickly but are less expensive and offer a way for issuers to lower the cost of capital.
The Panera financing is not expected to include a term loan B portion, according to two of the bankers.
The financing follows a path that JAB has previously used when purchasing companies. The firm has typically utilized a pro rata component and placed the debt on the target’s books in a similar way to leveraged buyouts, which has led to the deals being leveraged as opposed to carrying the investment grade rating that JAB holds.
JAB is rated Baa1/BBB+. Panera is currently unrated.
JAB opted to only tap the pro rata market in June 2016 when it last financed a deal. At that time, it lined up a US$350m term loan A and a US$150m revolving credit facility to finance its US$1.35bn purchase of Krispy Kreme, according to Thomson Reuters LPC data. Both tranches priced at 275bp over Libor.
JAB increased the size of the term loan A backing its acquisition of Keurig in January 2016 to US$3.075bn from US$2.95bn. That loan, along with a US$500m revolving credit facility, priced at 200bp over Libor, as well.
However, in addition to the pro rata debt, JAB opted to arrange a US$1.875bn term loan B and a €842m term loan B to back the larger Keurig deal. The dollar-denominated loan priced at 450bp over Libor while the euro-denominated loan priced at 425bp over Euribor.
JP Morgan declined comment. A spokesperson for JAB Holdings did not immediately return request for comment.
(Additional reporting by Kristen Haunss) (Reporting by Jonathan Schwarzberg and Lynn Adler; Editing By Jon Methven)
May 30 The following are the top stories on the business pages of British newspapers. Reuters has not verified these stories and does not vouch for their accuracy.
VANCOUVER, May 29 British Columbia's minority Green Party on Monday struck a deal with the left-leaning New Democrats to govern Canada's western-most province, a move that casts doubt on the future of key energy projects from firms such as Kinder Morgan Inc.