Premier Foods PLC (LON:PFD) is to save itself £8mln a year in financing costs after raising £330mln through a loan note issue.
The five-year fixed rate notes carry a coupon, or annual interest rate of 3.5% and the funds raised will be used to redeem the £300mln fixed-rate notes due for redemption in October 2023, which currently attract a 6.25% interest rate.
As a result of this nifty bit of financial engineering by the company behind the Mr Kipling, Oxo and Ambrosia brands, Premier has raised its (adjusted) profit before tax (PBT) guidance.
"The pricing of these notes at 3.5% further illustrates the substantial progress we have made in the last two years to strengthen our financial position. With now significantly improved leverage, our reduced levels of fixed debt and lower interest costs mean we are raising our expectations for adjusted PBT," said Duncan Leggett, the chief financial officer of Premier.