MENLO PARK, Calif., Sept. 27, 2016 (GLOBE NEWSWIRE) — Landec Corporation (NASDAQ:LNDC), a leading innovator of diversified health and wellness solutions within the packaged food and biomaterial markets, announced that it has successfully completed a new syndicated credit facility with JPMorgan Chase, BMO Harris Bank, a part of Bank of Montreal Financial Group and City National Bank, a subsidiary of Royal Bank of Canada, providing a lower interest expense and increased financial flexibility in support of Landec’s five-year growth plan. Landec plans to use these funds to capitalize on the significant tailwinds in the healthy living segments in which it participates by expanding its existing operations and fueling its internal innovation initiatives.
The syndicate is being jointly led by JPMorgan Chase and BMO Harris, each committing $62.5 million, and with City National as a participant committing $25 million, for a total credit facility of $150 million, consisting of a $50 million term loan that refinanced existing debt and a $100 million revolving credit facility.
The $50 million term loan has a five-year term with a ten-year amortization and no prepayment penalties. Our interest expense over the next 12 months is projected to decrease by approximately $400,000 compared to the interest expense the Company would have incurred on the previous loans that were refinanced. The interest rate is based on Landec’s leverage ratio and can range from LIBOR plus 1.25% to 2.25%. The spread at close was 1.75% for an initial interest rate of approximately 2.30%. This initial interest rate is approximately 115 basis points lower than the average interest rate the Company was paying on the refinanced debt.