Dean Foods (DF) Sees Upside Following Capital Raise; Other Items

Dean Foods (NYSE: DF) shares are showing some strength this morning, following the announcement that they will be offering $400 million in Senior Notes, the proceeds of which will go to pay down a portion of the outstanding term loan A under the Company's senior secured credit facility and to pay fees and expenses related to the previously disclosed amendment of that credit facility.

Additionally, the company disclosed the following today:

• they have identified unrecoverable deferred tax asset balances associated with errors primarily related to periods prior to 2007. Since the effects of the errors are not material to the financial results for the year ending December 31, 2010, and were not material to any individual year prior to 2010, the Company will adjust its deferred tax assets and record a non-cash income tax charge of approximately $10.8 million in Q410;
  
  
• The Company has reached an agreement with the plaintiffs in its previously disclosed purported class action antitrust lawsuit filed in the United States District Court for the District of Vermont to settle all claims against the Company in such action. The settlement agreement is subject to court approval. There can be no assurance that the court will approve the agreement as proposed by the parties. Pursuant to the agreement, the Company would be obligated to pay $30 million, and would agree to other terms and conditions with respect to its raw milk procurement activities at certain of its processing plants located in the Northeast. The Company expects to take a charge in the fourth quarter of 2010 of approximately $18.4 million, net of tax, with respect to the proposed settlement;
  
  
• They have entered into an amendment o its Second Amended and Restated Credit Agreement dated as of April 2, 2007, among the Company, the lenders party thereto and JPMorgan Chase Bank, National Association, in its capacity as administrative agent for the lenders. Upon its effectiveness, Amendment No. 1 would amend the maximum permitted leverage ratio and the minimum permitted interest coverage ratio under the Existing Credit Facility and would add a senior secured leverage ratio to the Existing Credit Facility.

More detail can be found on the U.S. SEC filing here.

The stock is up about 5% in early trading today.

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