Bank of China participates in rescheduling of $1.5 billion USD syndicated term loan to J.M. Smucker Company — via reducing interest rate margins — for the acquisition of Ainsworth Pet Nutrition in 2019 (Linked to Record ID#105458)

Project narrative

On April 27, 2018, financial close was reached on a deal in which a syndicate of banks — including Bank of China, Bank of America, N.A., JPMorgan Chase Bank, N.A., Bank of Montreal, and PNC Bank, N.A. — entered into a $1.5 billion USD term loan agreement with The J. M. Smucker Company (a leading Ohio-based manufacturer of branded food products) for the purpose of financing the acquisition of Ainsworth Pet Nutrition. The loan’s maturity is 3 years, and the interest rate is LIBOR plus an applicable margin based on the credit ratings. As of April 2018, the company’s credit ratings are Baa2 and BBB from Moody and S&P, respectively, which would qualify the borrower for Level III interest rate (1.125%). The proceeds were used by the borrower primarily to fund the acquisition of Ainsworth Pet Nutrition and related expenses, as well as to repay certain outstanding debts of the acquired business. While Bank of China contributed $25 million USD to this loan (Record ID#105458), the following lenders also participated: Bank of America, N.A. ($300 million USD), JPMorgan Chase Bank, N.A. ($300 million USD), Bank of Montreal ($300 million USD), PNC Bank, N.A. ($300 million USD), Fifth Third Bank ($100 million USD), Wells Fargo Bank, N.A. ($100 million USD), U.S. Bank National Association ($50 million USD), and KeyBank National Association ($25 million USD). On November 14, 2019, the borrower and companies entered into an amendment in which they changed the the rates for applicable margins. As of November 2018, the company maintained the same credit ratings, but the new applicable margins are 0.8% (Level I). Bank of China’s contribution to this change is captured in Record ID#105459. On May 14, 2018, the company finished the acquisition. During the third quarter of 2021, the company repaid the loan.