U.S. agribusiness and food company Bunge Ltd. and a number of its subsidiaries have secured debt facilities to provide the company's sugar milling business financial flexibility, in connection to Bunge's previously announced plan to reduce its exposure to the sugar milling business in Brazil.
According to a May 3 SEC filing, Bunge's wholly owned unit Bunge Limited Finance Corp., or BLFC, entered into an unsecured $700 million revolving credit facility, under which it can increase the total revolving commitments in an aggregate amount not exceeding $100 million. The facility matures on the fifth anniversary of the date it took effect.
The subsidiary expects to use proceeds from the borrowings to fund intercompany advances to Bunge and/or certain Bunge subsidiaries, repay outstanding debt and pay expenses incurred in connection with the debt facility, among other obligations.
In addition, certain wholly owned Brazilian sugar milling subsidiaries of Bunge, or the pre-export borrowers, also entered into a secured pre-export term loan facility.
According to the filing, Bunge and BLFC can opt to convert the total revolving commitments under the revolving credit facility to an equal amount of commitments of the lenders to make term pre-export loans to the pre-export borrowers at any time that Bunge no longer intends to own a controlling voting interest in the pre-export borrowers.
Upon the conversion, BLFC will repay any outstanding loans and the revolving credit facility, and the revolving facility guaranty will automatically terminate.
The pre-export facility will mature on the same date that is the revolving maturity date as of the conversion, provided that if the revolving maturity date was not extended prior to conversion, the pre-export borrowers can extend the pre-export maturity date by up to 12 months with the prior written consent of the lenders.
Proceeds from borrowings under the pre-export facility will be used to finance the export of Brazilian raw and/or white sugar, Brazilian hydrous ethanol and/or Brazilian anhydrous ethanol, and/or other sugarcane-based products, Bunge said.