Title: Froneri Sets Final Pricing and Tranching for EUR/USD 7NC3 SSNs Deal
Original Author: Pranav Ghai, IFR (International Financing Review)
Froneri, the global ice cream manufacturer co-owned by PAI Partners and Nestlé, has finalized pricing and tranching details for its dual-currency senior secured notes (SSNs) offering. This move is part of a broader refinancing strategy following its acquisition of Nestlé USA’s frozen food business. The highly-anticipated bond issuance has drawn considerable investor interest and reflects robust demand in the leveraged finance market.
This rewritten article presents a comprehensive breakdown of Froneri’s bond transaction details, including issue size, pricing dynamics, investor response, timing, and its strategic implications.
Deal Overview
Froneri launched a dual-currency (€ and $) offering of seven-year non-call three (7NC3) senior secured notes. The transaction is part of a larger capital structure refinancing that includes a Term Loan B and revolving credit facility. The key details of the offering are as follows:
– Issuer: Froneri International Ltd
– Deal type: Dual-currency high-yield bond offering
– Currency: Euro and US Dollar
– Structure: Senior Secured Notes (SSNs), 7-year maturity, non-callable for 3 years (7NC3)
– Purpose: Part of a leveraged buyout-related refinancing package to support Froneri’s acquisition of Nestlé USA’s ice cream and frozen food operations
– Sponsors: PAI Partners and Nestlé
– Joint Global Coordinators: BNP Paribas and Credit Suisse
– Additional Bookrunners: HSBC, Barclays, Goldman Sachs, and ING
– Ratings: Expected to be rated B2/B by Moody’s and S&P respectively
Final Pricing Details
After multiple rounds of investor dialogues and feedback, Froneri finalized the terms of the offering as follows:
– Euro tranche (EUR 500 million):
– Coupon: 6.25%
– Issue Price: 100.0 (yielding 6.25%)
– US Dollar tranche (USD 800 million):
– Coupon: 8.25%
– Issue Price: 100.0 (yielding 8.25%)
The final price talk for both tranches came in slightly tighter than initial guidance, reflecting strong investor interest and favorable market conditions. Initial price talk on the EUR tranche was in the range of 6.50%, while the USD tranche was initially guided at around 8.50%.
Demand and Investor Reception
The Froneri offering attracted solid interest from both US and European investors. The demand backlog built steadily through the bookbuild process, enabling the company to price at the tight end of revised guidance.
Key drivers of investor appetite included:
– Strong brand and performance track record of Froneri
– Solid sponsorship by private equity firm PAI Partners and multinational food company Nestlé
– Defensive business model based on non-cyclical consumer staples (ice cream and frozen products)
– Opportunity to gain diversified exposure across USD and EUR paper in a single transaction
– Adequate covenant protections and senior-secured positioning within the capital structure
Geographical distribution of orders spanned a diverse set of institutional buyers, including:
– European high-yield funds
– US-based asset managers and CLOs
– Bank treasuries
– Multi-strategy hedge funds
– Insurance accounts looking for yield pickup
Tranche Breakdown and Timing
The tranching decision strategically aligned with anticipated investor appetite in global credit markets. By structuring the transaction to include both EUR and USD tranches, Froneri enhanced the size and flexibility of the offering. This currency diversification allowed for balancing global investor interest while managing currency and interest rate risks.
– EUR Tranche:
– Targeted at European high-yield investors
– Placed against positive market momentum in the euro high-yield space
– USD Tr
Read more on EUR/USD trading.