12:03 PM EST, 02/07/2025 (MT Newswires) -- (Updates with Citigroup's ( C ) reply to a request for comment in the last paragraph.)

A group of banks led by Citigroup ( C ) is approaching private credit firms after struggling to sell a $575 million leveraged loan package for Lakeview Farms' acquisition of Noosa Yoghurt, Bloomberg reported Friday, citing sources with knowledge of the matter.

The financing includes a riskier second-lien loan, which, along with concerns over Lakeview's high debt levels, has deterred traditional collateralized loan obligation managers, according to the media outlet.

Investors who reviewed the deal late last year were reportedly wary of Lakeview's leverage and the potential for fluctuating consumer demand for products like salsa and dips amid high interest rates.

Lakeview Farms, a portfolio company of CapVest Partners, agreed in November to acquire Noosa from Campbell's Company (CPB), according to Bloomberg.

The banks reportedly launched a $500 million first-lien loan sale at the end of last month, with investor commitments due Monday. The loan is being offered at 5% to 5.25% over the benchmark rate and at 95 cents on the dollar.

The debt will be used not only to fund the Noosa acquisition but also to refinance Lakeview Farms' existing obligations, Bloomberg reported, citing Moody's Ratings.

Lakeview's leverage is expected to reach between 7 and 7.5 times earnings for the current 12-month period, potentially decreasing to 5.5 to 6 times if earnings grow in the next 12 to 18 months, according to Moody's Ratings.

CapVest and Citigroup ( C ) declined to comment, while Lakeview Farms and Noosa Yoghurt did not immediately respond to requests for comment from MT Newswires.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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