On September 27, 2023, Pilgrim’s Pride Corporation, a Delaware corporation (the “Company”), announced the pricing of its offering of $500.0 million aggregate principal amount of 6.875% senior notes due 2034 (the “Notes”).
The Notes will be registered under the Securities Act of 1933, as amended pursuant to a registration statement (the “Shelf Registration Statement”) on Form S-3ASR (No. 333-270754) previously filed with the Securities and Exchange Commission. The Notes will be sold pursuant to a prospectus, dated March 22, 2023 (the “Base Prospectus”), forming a part of the Company’s Shelf Registration Statement, and a prospectus supplement dated September 27, 2023 (the “Prospectus Supplement”).
The Company intends to use the net proceeds from the offering, together with cash on hand, to pay the tender price of any outstanding 5.875% Senior Notes due 2027 (the “2027 Notes”) tendered in the tender offer commenced by the Company concurrently with the offering and to redeem any 2027 Notes that remain outstanding following the consummation of such tender offer. The offering is expected to close on or about October 12, 2023 (the “Closing Date”), subject to customary closing conditions.
The Notes will be issued pursuant to an indenture, dated as of April 19, 2023 (the “Base Indenture”), among the Company, the guarantors party thereto and Regions Bank, as Trustee (the “Trustee”), as supplemented by a second supplemental indenture, to be dated as of the Closing Date (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and the Trustee.
The Notes are the Company’s unsecured senior obligations and will rank equally with all of the Company’s existing and future unsecured senior debt and rank senior to all of the Company’s existing and future subordinated debt. The Notes will be effectively junior to the Company’s existing and future secured debt to the extent of the value of the collateral securing such debt. The Notes will be structurally subordinated to all existing and future liabilities (including trade payables) of the Company’s subsidiaries.
In connection with the offering of the Notes, on September 27, 2023, the Company entered into an underwriting agreement with Barclay’s Capital Inc. and Mizuho Securities USA LLC, as representatives of the several underwriters named therein, relating to the sale of the Notes (the “Underwriting Agreement”). The Underwriting Agreement includes customary representations, warranties, covenants, closing conditions, indemnification obligations and other customary provisions.
The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, which is incorporated herein by reference and attached hereto as Exhibit 1.1.
In the ordinary course of their respective businesses, the underwriters and their affiliates have engaged, and may in the future engage, in commercial banking and/or investment banking transactions with the Company and its affiliates, for which they have received, and in the future expect to receive, customary compensation. In addition, affiliates of the underwriters from time to time have acted or in the future may continue to act as lenders to the Company and its affiliates, for which they have received or expect to receive customary compensation. The Company intends to use the full amount of the net proceeds from the offering of the Notes, together with cash on hand, to repurchase and/or redeem the 2027 Notes. If the underwriters or their affiliates hold 2027 Notes, they may tender such 2027 Notes in the Tender Offer and receive a portion of the proceeds from the offering of the Notes in payment therefore or, if the underwriters or their affiliates hold 2027 Notes and do not tender them in the Tender Offer, they may receive a portion of the proceeds from the offering of the Notes if and when we redeem such 2027 Notes. Because such underwriters or their affiliates may receive a portion of the proceeds from the offering (in excess of any underwriters’ discount), such underwriters may be deemed to have a “conflict of interest” with the Company.
