US Foods sets final terms on $900M term loan for refinancing; allocations today

A Wells Fargo-led arranger group has set terms on the $900 million term loan B for US Foods Holding Corp. that will be used to refinance the issuer's existing term loan due September 2023, according to sources. Recommitments are due by 1 p.m. ET today, with allocations to follow thereafter.

The seven-year covenant-lite first-lien term loan finalized at L+275, with a 0% Libor floor and an original issue discount of 99.875, from 99.5 at launch. Lenders are offered six months of 101 soft call protection. At final terms, the yield to maturity is 2.94%.

The full arranger group includes Citi, BofA Securities, KKR Capital Markets, J.P. Morgan, Truist Securities, Fifth Third Bank, Morgan Stanley, Goldman Sachs, BMO Capital Markets, Rabobank, ING Capital Markets and UBS.

The issuer also has a covenant-lite first-lien term loan due September 2026 (L+200, 0% Libor floor) that was placed in August 2019 to back the company's acquisition of Services Group of America's Food Group of Cos.

Rating agencies have assigned facility ratings of BB/B1, with a 2 recovery rating from S&P Global Ratings. Corporate ratings are BB-/B1, with a stable outlook from both Ratings and Moody's.

US Foods Holding Corp. markets and distributes fresh, frozen, and dry food and nonfood products to food service customers in the U.S.