090222 Tyson Foods offers $500M in notes

February 19, 2009

Springdale, AR -- Tyson Foods Inc., the world's largest meat producer, said Thursday it will issue $500 million in notes and it plans to arrange a new $1 billion line of credit.

The Springdale-based company announced that the $500 million in unsecured senior notes would be due 2014. The company said it would use the proceeds to repay debt and end commitments for its accounts receivables.

Tyson also said the $1 billion line of credit would be secured by inventory, accounts receivable and cash and would be guaranteed by Tyson's domestic subsidiaries.

In December, Tyson pledged virtually the entire company as collateral when it signed new terms with its creditors. The company said the $1 billion line of credit would replace that revolving credit facility.

The notes sale and new credit agreement's closing are targeted to occur in March.

Tyson, like other meat makers, has been suffering due to volatile prices for key items like corn and grains, and slumping demand as cash-strapped consumers abandon eating in restaurants. There's also an oversupply of meat on the market, which keeps prices down.

The company has more than 107,000 workers at more than 300 plants and offices in the U.S. and globally.


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