On 24 January, the firm announced plans to make notes worth $300m and €275m (approximately £288m) available in the private placement market.
The proceeds of the debt offering will in part be used to refinance the bridge facility Tate & Lyle accessed to complete its acquisition of CP Kelco in November 2024.
The transaction is expected to complete on 12 March 2025, when the following notes will be issued: $85m 5.56% notes due 2030, $65m floating-rate notes due 2030, $40m floating-rate notes due 2032, $110m 5.84% notes due 2033, €140m 4.03% notes due 2035, and €135m 4.13% notes due 2037.
Sarah Kuijlaars, chief financial officer at Tate & Lyle, said that the offering had received strong support from investors and is “significantly oversubscribed”.
“The notes will enable us to refinance the bridge facility we used to part-finance the acquisition of CP Kelco, which represented an exciting step in the acceleration of our strategy to be a leading speciality food and beverage solutions business,” Kuijlaars added.
“The fixed-rate notes allow us to lock into attractive long-term interest rates, and the floating-rate notes are at a competitive margin over the Secured Overnight Financing Rate (SOFR) and create optionality for early repayment as we deleverage over time. Together with our existing debt, the new notes achieve our desired fixed/floating mix and extend our debt maturity profile.”
Julian Wild, corporate finance director at law firm Rollits, explained that it is common for firms completing acquisitions to use short-term bridging finance as Tate & Lyle has done in this instance, before refinancing with better terms.
“That sort of short-term bridging finance is expensive, so acquirers move quickly to replace the bridging finance with longer-term funding on more attractive terms,” he continued.
“This is clearly what T&L has done and the amount raised has also given them some headroom to fund other activities.”
