| LONDON, June 20
LONDON, June 20 Frozen foods maker Iglo Group
has launched a 1.6 billion euro ($2.18 billion) covenant-lite
loan and bond refinancing which will cut the company's borrowing
costs and give flexibility for a potential IPO, banking sources
said on Friday.
Iglo Group is owned by private equity firm Permira and is
known as Birds Eye in the UK and Ireland and Findus in Italy.
Deutsche Bank, Credit Suisse and Nomura have been mandated
to lead the deal, which will refinance existing loans, cut
pricing and allow a potential listing, the bankers said.
The deal consists of up to 1.1 billion euros of leveraged
loans and up to 750 million euros of high yield bonds, which
will be denominated in euros and sterling, they added.
Permira declined to comment.
The refinancing is being done on a covenant-lite basis and
does not include traditional maintenance covenants that
European investors initially protested against covenant-lite
loans, which are common in the US, but have become more willing
to invest in these riskier deals due to a lack of other deals to
A loan backing the buyout of French veterinary
pharmaceutical firm Ceva Sante Animale was Europe's first 'pure'
covenant-lite loan earlier this year.
Iglo has struggled to meet the covenants on its existing
debt and agreed to reset covenants in December 2013 after the
company did not perform as well as expected. [ID: nRLP33838a]
Birds Eye was forced to withdraw some products in Britain
and Ireland amid the horse meat scandal in February 2013 and a
new CEO, Elio Leoni, was also appointed in May 2013.
The refinancing will be shown to investors at a bank meeting
on June 24 in London and commitments are due July 2.
A six-year euro term loan has price guidance of 450 basis
points (bps) over Euribor and 500bps on a six-year sterling term
loan. The existing loan pays 475bps on euros and 537.5bps on
An 80 million euro, five-year revolving credit is also
included, with price guidance of 425bps.
Permira bought Iglo from Unilver in 2006 for 1.8 billion
euros, backed by 1.5 billion euros of leveraged loans.
The private equity firm later bought the remaining part of
Unilever's European frozen food business, Findus Italy, in a
deal financed with 500 million euros of loans.
In 2012, Permira paid itself a 319 million euros dividend by
raising new loans and taking some cash from Iglo's balance
($1 = 0.7336 Euros)
(Editing by Tessa Walsh)