DOW JONES NEWSWIRES
Smithfield Foods Inc. (SFD) will offer $500 million in senior
secured six-year notes as it looks to pay back debt.
The world's largest pork processor and hog producer also said it
has begun arranging a new $1 billion asset-backed credit facility
to replace its current U.S. revolving credit facility. The new pact
will include an option to increase the available credit to $1.3
billion in the future.
It is also negotiating a new $200-million term loan expected to
mature in August 2013 to replace a same-sized one due two years
earlier.
Smithfield said it will also use the proceeds from the note
offering for general corporate purposes.
The company was hurt by the hog-price slide after the H1N1 flu
scare erupted in April, as anxiety and bad publicity caused the
market to plummet even though the flu can't be caught from eating
pork. The company has already cut jobs, closed plants and reduced
its herd amid an industrywide softening of once-booming export
demand.
The company, which reported its first annual loss in three
decades, said last week it expects its results to improve this
fiscal year as the battered industry cuts production in order to
raise prices.
Smithfield's shares closed Wednesday at $13.04 and haven't
traded premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com