Sysco Plans Senior Notes Offering

(RTTNews) - Sysco Corp. (SYY) said Tuesday that it plans to issue unsecured notes in a public offering.

The notes are expected to be issued in six parts with maturities ranging from three years to 30 years.

Sysco plans to use the net proceeds from the sale of the notes to pay the cash portion of the consideration for Sysco's proposed merger with US Foods, to refinance certain indebtedness of US Foods, to unwind certain cash flow hedges that Sysco entered into in contemplation of its assumption or refinancing of such indebtedness, to repay all or a portion of Sysco's outstanding commercial paper and to pay expected future direct transaction costs related to the merger.

Consummation of the merger is subject to customary closing conditions, including the completion of a regulatory review process by the Federal Trade Commission, and is expected to occur in the third or fourth quarter of calendar 2014, but not concurrently with the offering of the notes.

If the closing of the merger does not occur on or prior to October 8, 2015, or if the agreement relating to such merger is terminated on or prior to October 8, 2015, Sysco anticipates that it will use the net proceeds from the sale of the notes to redeem each series of notes in whole, at a redemption price equal to 101 percent of the aggregate principal amount of such series of notes, plus accrued and unpaid interest.