SMITHFIELD, VA. — As part of a $1 billion revolving asset-based credit facility for Smithfield Foods Inc., GE Capital, Corporate Finance has loaned $150 million to the company. The arrangement is part of the company’s debt restructuring efforts.

"GE’s commitment was significant in that it accounted for the largest portion of the overall credit facility, helping provide Smithfield with the liquidity it needed on a going-forward basis," said Carey Dubois, vice-president of finance for Smithfield Foods. "GE’s in-depth knowledge of the food sector was invaluable with its participation and role in this financing."

"Protein producers and processors have been faced with unprecedented commodity price volatility, as well as cyclical demand over the last 18 months," said Dennis Krause, food, beverage & agribusiness industry leader for GE Capital. "Understanding these challenges helps GE structure smarter liquidity solutions for customers."

In other news, Smithfield has closed its previously announced offering of $225 million aggregate principal amount of senior secured notes due July 2014. The notes accrue interest at a rate of 10% per annum and have been issued at a price equal to 104% of their face value, plus accrued interest from July 2 through Aug. 14.

The notes have identical terms and conditions, other than issue date and issue price, as the $625 million of 10% senior secured notes due 2014 issued by the company on July 2. Smithfield intends to use the proceeds from the notes offering, together with other available cash, to repay amounts outstanding under its European revolving credit facility, which will be terminated upon repayment in full.

"The issuance of these additional notes and the repayment of our European credit facility continue our proactive steps to strengthen our balance sheet," said C. Larry Pope, president and chief executive of the company. "We have further reduced our exposure to financial covenant risks, and we believe this notes offering, together with our July notes offering, new A.B.L. credit facility and new Rabobank term loan, will enable us to weather the current economic environment and the results of our hog production segment."