Sysco Finalizes €1B Junior Subordinated Notes to Fund $29.1B Jetro Acquisition
SYY is trading near its 52-week low of $68.19 (15% above the low).
Summary
Sysco finalized the terms of its €1B junior subordinated notes offering, the final tranche of financing for its $29.1B Jetro Restaurant Depot acquisition, with a 6.000% initial rate and optional interest deferral.
Key Events · Financing and Capital Events · SYY
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€1B Junior Subordinated Notes Finalized
Sysco priced €1,000,000,000 of 6.000% junior subordinated notes due October 6, 2056, with a 2.554% initial margin over the five-year swap rate and step-ups of 0.25% in 2037 and 1.00% in 2052.
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Proceeds Fund Jetro Acquisition
Net proceeds of approximately €0.99B (after 1.000% underwriting discount of €10M and $4.03M expenses) will fund the cash consideration for the $29.1B Jetro Restaurant Depot acquisition.
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Special Mandatory Redemption
If the Jetro acquisition does not close by the Outside Date (March 30, 2028, subject to extension), Sysco must redeem the notes at 101% of principal plus accrued interest.
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Optional Interest Deferral
Sysco may defer interest payments for up to 10 consecutive years, with deferred interest accruing additional interest; during deferral, dividends and payments on parity securities are restricted.
Analysis · SYY · Trade & Services
Sysco has finalized the terms of its €1 billion 6.000% junior subordinated notes due 2056, the last major piece of the financing package for its pending $29.1 billion Jetro Restaurant Depot acquisition. The notes carry a 2.554% initial margin over the five-year swap rate, step up 0.25% in 2037 and another 1.00% in 2052, and give Sysco the option to defer interest for up to 10 consecutive years. If the Jetro deal fails to close by the Outside Date, Sysco must redeem the notes at 101% of principal. This filing completes the debt stack alongside the $10.75B senior notes, $3.9B USD junior subordinated notes, C$1.5B senior notes, and $967M equity offering already priced this month.
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At the time of this filing, SYY was trading at $78.14 on NYSE in the Trade & Services sector, with a market capitalization of approximately $38.5B. The 52-week trading range was $68.19 to $91.85. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.