LONDON UK consumer goods group Reckitt Benckiser (RB.L) has closed syndication of US$21.2bn-eqivalent of loans supporting its US$17.9bn acquisition of US baby formula maker Mead Johnson Nutrition Co (MJN.N), the company announced on Friday.
The loans were fully committed on a certain funds basis ahead of the announcement of the acquisition by Bank of America Merrill Lynch, Deutsche Bank and HSBC as underwriters, bookrunners and mandated lead arrangers.
The financing comprises US$20bn of bridge loans and term loans and a £1bn(US$1.22bn) revolving credit facility.
The bridge loans comprise a US$8bn one-year facility to cover the cash consideration and a US$3bn one-year facility to refinance existing Mead Johnson bonds if required.
The term loans are split between a US$4.5bn three-year term loan and a US$4.5bn five-year term loan.
The revolving credit facility provides financing headroom from the date of the completion of the acquisition.
Joining the financing in syndication as mandated lead arrangers were Banco Santander, BBVA, Bank of China, BNP Paribas, Citigroup, Commerzbank, ING Bank, JP Morgan, Mizuho, Royal Bank of Canada, Standard Chartered, Sumitomo Mitsui Banking Corporation, Bank of Nova Scotia, MUFG and UniCredit.
Wells Fargo was lead arranger, while SEB was arranger.
Reckitt said previously that it expects to refinance the bridge loan through bonds. The company aims to retain a strong investment grade rating. It is rated A+ by S&P and A1 by Moody’s.
(Editing by Christopher Mangham)