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America’s protein obsession is fueling the order book for Chobani’s latest loan transaction, according to 9fin sources, and it’s not all coming from gym bros.

Chobani’s popularity also overlaps with customers scaling back on discretionary spending and changing consumption habits due to the gloomy economic outlook. That makes demand for yogurt — a cheap protein product — much stickier than for less healthy snacks.

“Your baskets are prioritized per the stored protein,” said an analyst. “The $7 package of Oreos is now a discretionary item for many people.”

Amid this demand, Chobani is refinancing its 2027 debt with a $1.275bn TLB due 2032 via TD Securities, which follows a $650m equity injection announced last week. Pro-forma adjusted LTM EBITDA as of 27 September to $715m, with net leverage for the OpCo at 3.2x and net leverage including the PIK notes at 4.2x, according to marketing materials seen by 9fin.

The new funding round values Chobani at $20bn, according to reports, placing it within the range of legacy competitor General Mills, which is valued at $25bn. 

The deal also takes out the preferred equity held by Healthcare of Ontario Pension Plan (HOOPP). Alongside this, the company is upsizing its $225m revolver to $250m and extending its maturity to 2030.

The 2032 loan is offered at SOFR+250bps, with a 99.75 OID and commitments are due 23 October at 12pm ET.

Creating culture

Beyond the protein obsession, the popularity of Greek yogurt has boosted Chobani’s strong performance over the last few years. According to a S&P report, the company’s S&P adjusted EBITDA between 2020 and 2024 rose by about 208% through a combination of market share gains in its core Greek yogurt category, diversification into other “yogurt-adjacent” offerings, which include nondairy milks.

That track record also convinced lenders to greenlight a massive spread cut when it repriced its 2027 loans earlier in January.

The uptick in GLP-1 drugs intake is another tailwind for Chobani, with doctors recommending patients to consume protein while taking such appetite suppressants, a buysider said.

“It fills that need with everyone trying to eat more protein,” added a second analyst.

Big yogurt

In light of the growing demand, Chobani is expanding its manufacturing capacity. As the first analyst put it, “demand is outstripping supply right now and they can't fully supply what the market needs.”

This year alone, it announced a $500m expansion plan for an existing facility at Twin Falls, Idaho, and another $1.2bn for a third US dairy processing facility in Rome, New York. This will be the “largest natural food production facility” in the nation upon completion.

While rating agencies pointed out that this capex spending would drive negative free cash flow in the near term, prospective lenders are confident that Chobani’s sustained popularity and future growth could make up for it.

“Their numbers are good every time I open a filing,” said a third analyst.

TD declined to comment. Chobani did not respond to a request for comment.