This excerpt taken from the DLM 8-K filed Oct 2, 2009.
On October 1, 2009, Del Monte Foods Company (the Company), its wholly owned subsidiary Del Monte Corporation (DMC), and certain subsidiaries of DMC (the Subsidiary Guarantors and, together with the Company, the Guarantors) entered into an indenture (the Indenture) with The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the issuance by DMC of $450 million aggregate principal amount of 7 1/2% senior subordinated notes due 2019 (the New Notes). The New Notes were sold in a private placement transaction, have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
The terms of the New Notes are governed by the Indenture. The New Notes were issued at a discount of 1.728% for gross proceeds of approximately $442.2 million and bear a stated interest rate of 7 1/2% per annum, payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2010. The New Notes mature on October 15, 2019. The New Notes are general unsecured senior subordinated obligations of DMC and are guaranteed on an unsecured senior subordinated basis by the Subsidiary Guarantors and on an unsecured subordinated basis by the Company.
At any time prior to October 15, 2014, DMC may redeem the New Notes in whole or in part at a redemption price equal to 100% of the principal amount of the notes redeemed, plus an applicable premium calculated as set forth in the Indenture, together with accrued and unpaid interest, if any, to the date of redemption. DMC may redeem the New Notes in whole or in part at any time on or after October 15, 2014, at redemption prices of 103.750%, 102.500% and 101.250% of the principal amount thereof if the redemption occurs during the 12-month periods beginning on October 15 of the years 2014, 2015 and 2016, respectively, and at a redemption price of 100% of the principal amount thereof on and after October 15, 2017, in each case, plus accrued and unpaid interest, if any, to the redemption date. In addition, on or prior to October 15, 2012, with the net cash proceeds from certain equity offerings, DMC may redeem up to 35% in aggregate principal amount of the New Notes at a redemption price of 107.500% of the principal amount of the New Notes to be redeemed, plus accrued and unpaid interest to the redemption date.
Upon the occurrence of a change of control triggering event, defined in the Indenture as both a change of control and a rating decline, if DMC has not redeemed the New Notes pursuant to its options described above, each holder of New Notes will have the right to require DMC to make an offer to repurchase the New Notes at a redemption price of 101% of the principal amount thereof, plus any accrued and unpaid interest to the repurchase date.
The Indenture contains customary covenants that limit the ability of DMC and its restricted subsidiaries (as defined in the Indenture), among other things, to:
Certain of these covenants will be suspended at any time that the New Notes are rated investment grade, as defined in the Indenture, if at such time no default or event of default has occurred and is continuing.
The Indenture also restricts the ability of the Company to enter into any consolidation, merger or sale of substantially all of its assets.
The Indenture contains customary events of default, including:
An event of default under the Indenture will allow either the trustee or the holders of at least 25% in principal amount of the then-outstanding New Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under the New Notes.
DMC used $433,224,000 of proceeds from the sale of the New Notes combined with $19,234,875 of other available funds to fund the payment of consideration and certain costs relating to the early settlement of DMCs cash tender offer and consent solicitation with respect to $438,748,000 in aggregate principal amount of its outstanding 8 5/8% senior subordinated notes due 2012 (the Old Notes). Accrued interest on the tendered Old Notes was also paid.
The foregoing description of the New Notes and the Indenture is qualified in its entirety by reference to the Indenture (including the form of New Notes attached thereto), copies of which are filed as Exhibits 4.1 and 4.2, respectively, to this Report.