JPMorgan, Citigroup and Deutsche Bank last Wednesday launched syndication of a $655 million senior secured credit facility for Asahi Tec's approximately $1.2 billion acquisition of Metaldyne. The deal consists of a $150 million asset-based revolver, a $60 million synthetic letter of credit and a $445 million term loan "B," which includes a $25 million delayed-draw facility. Price talk is LIBOR plus 2% on the revolver and LIBOR plus 3 3/4-4% on the remaining tranches. The deal will also be used to refinance the company's existing debt.
Metaldyne was one of a number of auto-related credits placed on CreditWatch with negative implications by Standard & Poor's back in August after Ford Motor announced production cuts (CIN, 8/28). Moody's Investors Service assigned a B2 rating to the company's term loan and LC, and a Ba3 to the revolver reflecting lower leverage expected after a $200 million injection of equity from Asahi Tec and other investors. After the transaction, Metaldyne will continue to operate as a standalone company. Moody's also noted the challenging industry conditions due to a cut in Big-3 North American production, the rising price of commodities and Metaldyne's high debt leverage. Pro forma for the acquisition, Moody's expects Metaldyne's debt to EBITDA ratio to be approximately 5.4 times.
Based in Plymouth, Mich., Metaldyne designs, engineers and assembles metal-formed and engineered products used in car transmissions, engines and chassis. Asahi Tec is also a designer and manufacturer of car parts, including iron cast and aluminum casting parts for truck and passenger car manufacturers. Calls to Jeff Stafeil, cfo, were not returned. A representative from Asahi Tec could not be reached.