SPRINGDALE, Ark. Bank of America Corp. pulled out of a $2.5 billion loan to Tyson Foods Inc., leaving J.P. Morgan Chase & Co., Merrill Lynch & Co., and SunTrust Banks Inc. holding the bag, Tyson Foods said Wednesday.
Bank of America was to take an agent role in the loan, funding about one-quarter of the deal, even after the chicken producer passed over its longtime lender in favor of J.P. Morgan Chase and Merrill Lynch as the deals lead arrangers. But executives at the Charlotte, N.C., banking company decided to pull out of the syndicate, said Louis Gottsponer, director of investor relations at Tyson.
Bank of America did not return calls about the deal.
Mr. Gottsponer said that no additional lenders will join the group and that the three remaining banks will compensate for Bank of Americas position. He declined to say why Tyson did not choose Bank of America to be the lead arranger.
Tyson plans to use the loan to finance its acquisition of the beef producer IBP Inc.