CSM’s Bakery Unit Said to Seek $1 Billion Loan for Buyout

CSM NV’s bakery supplies business is seeking $1 billion in loans to back its buyout by Rhone Capital LLC, according to two people with knowledge of the transaction.

CSM Bakery Supplies is proposing to pay interest at 3.75 percentage points to 4 percentage points more than the London interbank offered rate on a $650 million first-lien term portion and 7.5 percentage points to 7.75 percentage points more than Libor on a $200 million second-lien piece, said the people, who asked not to be identified because terms are private. The lending benchmark on both loans will have a 1 percent minimum. Lender commitments are due tomorrow.

Morgan Stanley, Credit Suisse Group AG, Deutsche Bank AG, Royal Bank of Canada and MerchCap Solutions LLC are arranging the financing, which includes a $150 million asset-based revolving credit line, the people said. The first-lien will be offered at 99 cents on the dollar and the second-lien at 98 cents.

CSM said on March 25 that it had agreed to sell CSM Bakery Supplies to New York-based buyout firm Rhone Capital for 1.05 billion euros ($1.35 billion) including debt. The sale is part of CSM’s plan to focus on bio-based ingredients.

Saskia Nuijten, a spokeswoman for Diemen, Netherland-based CSM, didn’t immediately respond to an e-mail seeking comment.

First-lien debt is repaid first in a bankruptcy or liquidation, second-lien debt is repaid next.

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