Del Monte Foods yesterday said it has completed the refinancing of debt left over from the company's January 1990 leveraged buyout.

According to placement agent Merrill Lynch & Co., the deal marked the year's largest highly leveraged transaction financing with a total of $827 million of funds raised.

Not only was the refinancing completed despite a virtually non-existent market for highly leveraged transaction credits, the senior-term debt portion was oversubscribed by $100 million, one source at Merrill said.

"The refinancing of our remaining acquisition indebtedness with the new capital structure marks the transition from a young LBO to a sound, seasoned credit," Norman S. Mackenzie, Del Monte's chief financial officer said in a company release.

The refinancing, all done privately, included $360 million of senior secured debt, consisting of $159 million of senior secured term loans and $201 million of senior secured floating rate notes. Both mature in 1997 and were priced to float at 250 basis points spread over London Interbank Offered Rate, the company said.

Proceeds were used to refinance some $102 million of Del Monte's $375 million senior subordinated increasing rate notes due 1998 and to pay its refinancing expenses and fees.

Also included in the refinancing was $142 million of senior subordinated pay-in-kind debentures maturing 2002. Proceeds were used to retire the remaining outstanding increasing rate notes. No cash interest is payable on the debentures until they mature.

Rounding out the refinancing was a $325 million revolving credit facility due 1995 that replaces a $275 million facility. The new facility, maturing in December 1993, bears interest at a floating rate of Libor plus 250 basis points.

Elsewhere, Texas-New Mexico Power Co. has reached an accord with its banks, a move expected to boost investor confidence in the company's upcoming $150 million debt issue, one analyst said.

"I don't see how they could have successfully sold the bond deal without having the banks in line," the analyst said.

Investors evaluating the $150 million deal had expressed some concern regarding the company's ability to secure a revolving credit agreement, the source said. Of large concern were some payments due on a construction loan due September 23.

But Texas-New Mexico announced yesterday that Chase Manhattan Bank, as agent for two banking syndicates, has reported that the banks unanimously agreed in principle to amend the company's construction financing facilities for TNP One, Units 1 and 2.

Texas-New Mexico's $150 million issue of debentures due 1996 through Lehman Brothers is rated Ba3 by Moody's Investors Service, analysts said.

The high-yield market overall was unchanged but holding good gains, one trader said.

High-grade corporate were up about a 1/2 point. In that market, Shell Oil Co. issued $250 million of 7% noncallable notes due 1995 and priced at 99.81%, to yield 7.04% or 21 basis points over interpolated three- and five-year treasuries. Both Moody's and Standard & Poor's Corp. rate the deal AAA. Lehman managed the deal.

Proceeds from the notes' sale will be used to refinance a portion of the company's outstanding floating rate debt, said Chester Martin, a corporate financial analyst at Shell. Shell chose to issue yesterday because it found interest rates to be favorable, Martin said.

Standard & Poor's affirmed its A-plus ratings on Colgate Palmolive Co.'s senior debt and preferred stock, as well as its A-1 Commercial paper rating in view of the company's recently announced intention to take a $243 million after-tax restructuring charge in fiscal 1991's third quarter.

Colgate's ongoing global diversification and dominance in many of the consumer and personal products markets it operates in, support its current rating, the agency said. The company has concentrated on its leading positions in core product areas through strategic acquisitions and divestitures, Standard & Poor's said.

Standard & Poor's also affirmed the BBB senior debt rating, BBB-minus subordinated debt and preferred stock, and A-2 commercial paper ratings of Tenneco Inc. and related entities.

Some $10.4 billion of debt is outstanding.

Duff & Phelps Inc. has assigned an A-plus rating to Household International's $100 million of 7% notes due Sept. 15, 1993. The 7.12% notes are noncallable prior to maturity. The rating is the same one assigned to Household's outstanding senior debt.

The rating reflects Household's position as the parent of one of the nation's largest finance companies, as well as its restructuring that has occurred over the past five years. During that period, Household has divested its merchandising, manufacturing, and car rental operations, and now focuses on its core financial service activities. Duff & Phelps regards the restructurings as a positive development.

Ohio Edison's Co.'s $150 million of 8.65% first mortgage bonds due 2003 received a BBB-plus rating from Duff & Phelps. The noncallable bonds were issued from an outstanding shelf registration, the agency said. Proceeds will be used to finance Ohio Edison's construction program and for other corporate purposes.

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