Independencia to Place DIP Funds

Brazilian meatpacker Independencia has reached an agreement with its creditors that allows it to raise a new $150m DIP financing. The facility is part of the company’s financial and restructuring, in the works for over a year. Investors are also being asked to exchange $525m worth of outstanding 9.875% coupon 2015 and 2017 bonds at a NPV loss of 50% and a tenor extension of 7 years. The new 5-year DIP transaction is expected to be launched at the end of this month, according to spokeswoman Fernanda Flauzino. Investors following the deal say the notes will carry a 12% coupon, and expect them to yield more than 12%, perhaps into the mid teens. Proceeds will be used to pay suppliers, for working capital and to reopen slaughtering units closed during the credit crisis. Boutique BTIG is managing the financing. Holders of the meatpacker’s on 2015 and 2017 bonds will soon be presented with the option to extend maturities, says Flauzino, adding details for this process now being worked out.