Dean Foods Able to Raise Capital (DF)

The announcement hit right before the market open and the release shows that Dean Foods announced preliminary plans to offer up to approximately $400 million in senior notes. These notes are also being made under a private placement or a 144A offering, so they won’t be registered securities and are for qualified institutional investors.

As far as the use of funds, that is shown to be to pay down a portion of the outstanding term loan under its senior secured credit facility and to pay fees and expenses related to the previously disclosed amendment of that credit facility.

While the offering is not final yet and while it is subject to market conditions, these offerings are rarely announced and then pulled or withdrawn.  Maybe things aren’t as bad as many have feared.

Right after the open, Dean Foods shares are up 2.4% at $7.63 versus a 52-week range of $7.13 to $18.79.

JON C. OGG