Chiquita Brands International announced that it proposes to offer $425 million aggregate principal amount of senior secured notes due 2021 in the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and outside the United States to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The notes and the related subsidiary guarantees will not be registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.

The net proceeds from the offering, together with borrowings under a new $200 million asset-based revolving credit facility to be entered into by the company concurrently with and conditioned upon closing of the note offering, will be used to repay its current credit facility, consisting of a $150.0 million senior secured revolving credit facility (of which $40 million was outstanding, excluding letters of credit, at December 31, 2012) and $305.3 million remaining at December 31, 2012 under a senior secured term loan due 2016, and to repay the $106.4 million outstanding of its 7 1/2% Senior Notes due 2014.

Editor's Note: The following is excerpted from Chiquita Brands recent 8-K filing with the SEC.

Chiquita Brands International, Inc. (the “Company,” “we,” or “CBII”) is providing updated information on the matters described below in connection with the proposed Notes offering described in the accompanying Form 8-K and press release.

The New ABL Facility

We intend to enter into the ABL Facility concurrently with the closing of the Notes offering. The ABL Facility is expected to have a maximum borrowing capacity of $200.0 million, subject to a borrowing base calculation based on specified advance rates against the value of our domestic accounts receivable, foreign accounts receivable, certain inventory, and certain domestic machinery and equipment. The borrowing base is expected to include up to $26.8 million in borrowing capacity based on specified advance rates against the value of certain domestic machinery and equipment (the “Fixed Asset Sub-Line”), and an additional availability amount of $7.5 million (the “Additional Availability Amount”). The facility is expected to mature at the earlier of five years from the date of closing and 60 days prior to the maturity of our existing Convertible Senior Notes due 2016, unless such notes have been satisfactorily refinanced.

Loans under the ABL Facility are expected to bear interest at:

• A rate equal to LIBOR plus a margin of from 1.75% to 2.25%, determined based on levels of borrowing availability reset each fiscal quarter;
• In the case of the Fixed Asset Sub-Line, a rate equal to LIBOR plus a margin from 2.25% to 2.75%, determined based on levels of borrowing availability reset each fiscal quarter; and 
• In the case of the Additional Availability Amount, a rate equal to LIBOR plus a margin from 2.75% to 3.25%, determined based on levels of borrowing availability reset each fiscal quarter.

Obligations under the new ABL Facility are expected to be secured by a first-priority security interest in present and future domestic receivables, inventory, equipment, and substantially all other domestic assets that are not under the first-priority security interest of the Notes, all subject to certain exceptions and permitted liens and by a second-priority interest in the existing and after acquired material domestic real estate, certain intellectual property and a pledge of 100% of the stock of substantially all of the Note issuers' and guarantors' domestic subsidiaries and up to 65% of the stock of certain foreign subsidiaries held by the Note issuers and the guarantors, and proceeds relating thereto. Under the new ABL Facility, it is expected that CBL and non-de minimis domestic subsidiaries will be borrowers. The facility is expected to be guaranteed on a full and unconditional basis by CBII and limited domestic and foreign subsidiaries of CBII. In addition, certain foreign subsidiaries of CBII may become borrowers under the new ABL Facility, and our foreign subsidiaries may guarantee those foreign borrowings.

The new ABL Facility will contain a fixed charge coverage ratio covenant which only becomes applicable when (a) an event of default under the facility occurs and is continuing or (b) the availability (as defined under such facility) is less than, the lesser of 10% of (i) the aggregate commitments thereunder and (ii) the borrowing base thereunder. The new ABL Facility is expected to also contain a covenant requiring us to maintain substantially all of our cash in accounts that are subject to the control of the collateral agent under the new ABL Facility which only becomes applicable when (a) an event of default under the facility occurs and is continuing or (b) the availability (as defined under such facility) is less than, the lesser of 12.5% of (i) the aggregate commitments thereunder and (ii) the borrowing base thereunder. The facility is expected to also contain other affirmative and negative covenants, including a required minimum fixed charge coverage ratio if excess availability is below a certain threshold defined in the new ABL facility. It is expected that there will be no credit ratings-related triggers in the facility.