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First Leveraged Term Loan Tied to SOFR

Chicken processor prepares to be a pioneer in a market that has been slow to adopt the new interest rate benchmark.

By Lisa Lee | September 15, 2021 at 04:05 PM

A loan financing the purchase of a chicken processing company is set to be the first in the $1.2 trillion leveraged-loan market to use the Secured Overnight Financing Rate (SOFR) as a benchmark next year, as lenders prepare to ditch the scandal-plagued LIBOR rate.

Wayne Farms’s $750 million loan, which will help fund Cargill Inc. and Continental Grain Co.’s planned acquisition of Sanderson Farms Inc., will initially use LIBOR as a benchmark this year, then automatically switch to SOFR in 2022, according to people familiar with the matter who aren’t authorized to speak publicly.

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