VF Corp Selling $900 Million In Bonds To Fund Timberland Acquisition

VF Corporation (VFC), an apparel company whose brands include Wrangler and The North Face, is planning to sell $900 million in debt Wednesday to fund its $2 billion acquisition of boot maker Timberland Company (TBL), according to a person familiar with the deal.

The two-part senior unsecured offering is composed of two-year floating notes and 10-year fixed notes.

Pricing is expected later Wednesday via joint bookrunners Bank of America Merrill Lynch and J.P. Morgan Chase & Co.

The deal contains a mandatory redemption provision, which means the company is required to redeem all notes at 101% of their face value if the Timberland acquisition is not completed on or prior to March 12, 2012.

The acquisition was announced on June 13 and is expected to close in the third quarter of this year.

The debt offering also has a change-of-control provision, which is designed to safeguard investors against event risk if the issuer is taken over in a leveraged buyout or undergoes some other fundamental corporate change. The covenant is also triggered at a premium price of $101.

The 10-year notes come with a par call three months prior to maturity, which means the company can redeem the notes at 100 cents on the dollar three months before they are set to mature.

The debt deal has been rated A3 by Moody's Investors Service and A- by Standard & Poor's.

--By Nicole Hong, Dow Jones Newswires; 212-416-3760; nicole.hong@dowjones.com

Timberland A (NYSE:TBL)
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