JP Morgan and Wells Fargo are joint bookrunners on the deal and a number of banks joined the deal on a sub-underwriting basis including Banco do Brasil, Barclays, Citigroup, HSBC, Itau Unibanco, RBC and UBS among others, bankers said.
Heinz will be bought for $72.50 a share, or $23.2 billion in cash. Including debt assumption, Heinz valued the deal at $28 billion, which it called the largest in food industry history.
Lender meetings are scheduled to take place in New York on Thursday and London on Friday.
The debt package consists of a $1.5 billion revolving credit facility (RCF) and $10.5 billion in term loans split between a six-year TLB1 tranche and seven-year TLB2 tranche. The term loans include 8.5 billion denominated in dollar, up to $1.4 billion in euros and around $600 million in sterling.
The RCF will pay a margin of 50 basis points (bps) over Libor if it remains undrawn or 200 bps if drawn. The dollar TLB1 and TLB2 are guided to pay an interest margin of around 275-300 bps over Libor and the euro and sterling TLB1 and TLB2 will pay slightly more at around 300-325 bps over Euribor/Libor as the currencies are perceived to be less liquid than dollars, bankers said.
The TLB1 and TLB2 will be offered with a 1 percent Libor floor and 99.5 original issue discount.
The TLB-1 will have 101 soft call protection, while the TLB-2 will have soft call protection of 101 in years one and two.
Corporate family ratings are Ba3/BB-/BB-, while facility ratings are Ba2/BB/BB+.
"Heinz is big, well liked and popular credit and people will be very keen to go into it. Syndication is likely to go smoothly," one of the bankers said.
Meanwhile, a $2.1 billion bridge to second-lien term loan, which is a component of the buyout debt, has been successfully syndicated. The bridge will be taken out by a high yield bond and roadshows for the bond are expected to take place in the next week or two, the bankers said.
Heinz also plans to roll over some existing debt that is not covered under change of control provisions for accelerated repayment.
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