Sysco prices C$1.5 billion in senior notes to fund acquisition
Sysco and Sysco Holdings issued C$1.5 billion across two tranches of senior notes, with net proceeds slated for the pending purchase of JRD Unico and Warehouse Realty.
Sysco Corporation (SYY) issued and sold C$750 million aggregate principal amount of 4.250% Senior Notes due 2030 and C$750 million aggregate principal amount of 4.800% Senior Notes due 2034, according to a regulatory filing on Thursday.
The offering generated net proceeds of approximately C$1.49 billion after deducting underwriters' discounts and estimated offering expenses. Sysco Corporation and Sysco Holdings Corporation acted as co-issuers for the offering.
The food service distributor intends to use the net proceeds to pay a portion of the cash consideration for the pending acquisition of JRD Unico, Inc. and Warehouse Realty, LLC, along with related fees and expenses. If the acquisition does not close, the funds will go toward a Special Mandatory Redemption.
The 2030 notes carry an interest rate of 4.250% per annum and mature on October 3, 2030. The 2034 notes carry an interest rate of 4.800% per annum and mature on October 3, 2034. Interest on both tranches is payable semi-annually in arrears on April 3 and October 3, starting on April 3, 2027.
The notes are unsecured obligations of the issuers, ranking equally in right of payment with all existing and future unsecured senior indebtedness. U.S. Bank Trust Company, National Association acts as trustee for the indenture.
In a separate transaction detailed in the filing, Sysco Corporation and Sysco Holdings entered into a fiftieth supplemental indenture to guarantee Sysco Corporation's existing senior notes under its existing senior notes indenture.