Magazine article American Banker

Chemical Leads $1.15 Billion Syndication for 2 Divisions of Freeport McMoRan Inc

Magazine article American Banker

Chemical Leads $1.15 Billion Syndication for 2 Divisions of Freeport McMoRan Inc

Article excerpt

Chemical Bank has won the mandate to lead $1.15 billion of financing for New Orleans-based Freeport McMoRan Inc.

Chemical and Chase Manhattan are equally underwriting the two part facility for separate divisions of the New Orleans-based natural resources conglomerate.

Separately, Chemical is leading a $650 million facility for Interstate Bakeries Corp of Kansas City, Mo. Most of the facility will support Interstate's announced purchase of the larger Continental Bakeries, makers of Wonderbread and Hostess products, from the Rallston Purina Company.

The two deals underscore escalating merger and acquisition activity, as well as the attractiveness of the syndicated loan market.

At the same point last year, these companies might have looked to the high yield bond market for financing, market sources note.

Freeport McMoRan Copper and Gold, a division of the Louisiana conglomerate, will use $750 million of its loan to become an independent, publicly traded company. The loan will provide working capital for the newly independent unit.

If Freeport shareholders approve of the spinoff, they will hold equity in two separate companies.

Freeport Resource Partners, a subsidiary of Freeport McMoRan, will use $400 million of the financing for working capital.

Chemical is expected to hold a bank meeting soon to syndicate the loans.

Chase is serving as the documentation agent for Freeport, while Chemical is acting as the administration and syndication agent. …

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