Mosaic Pieces Together New Debt

JPMorgan is in the market with a new $1.05 billion senior secured credit facility for The Mosaic Co.

  • 10 Nov 2006
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JPMorgan is in the market with a new $1.05 billion senior secured credit facility for The Mosaic Co. The credit will be used by the company, along with about $950 million in new senior notes, to finance a previously announced tender offer and refinance existing debt. The deal consists of a five-year, $250 million "A" term loan and a seven-year, $800 million term loan "B." Pricing on the credit is LIBOR plus 1 1/2% on the "A" term loan and LIBOR plus 2% on the term loan "B," according to market sources. The company also intends to offer $950 million of new senior notes due 2014 and 2016.

One investor was interested in the deal because the company has such a big name in the industry. Based in Plymouth, Minn., Mosaic is a producer and marketer of concentrated phosphate and potash crop nutrients. Another market source said pricing on the deal will probably be flexed down.

Mosaic announced Oct. 31 it had commenced a tender offer for all of its 6.875% debt due 2007, 10.875% senior notes due 2008, 11.25% senior notes due 2011 and 10.875% senior notes due 2012, totaling approximately $1.5 billion. A company spokesman said the company chose to hit the market now for three reasons ­ to lower interest rates, reduce covenant restrictions and to increase flexibility. He mentioned existing covenants were "very, very restrictive." The new combination of senior secured credits and senior notes will allow the company more flexibility when it comes to EBITDA coverage, joint-venture agreements and dividends, he said. "We'll be having a lot of cash flow and want to pay down debt," and the new senior secured credit will allow the company to do so, he said.

Mosaic last hit the market in February 2005 for an $850 million credit facility from the bank. The deal comprised a $450 million revolver, a $50 million "A" term loan and a $350 million term loan "B" (LMW, 2/25/2005). The new credit will partially be used to refinance about $344.7 million under the existing term loan "B."

  • 10 Nov 2006

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Citi 7,171 21 10.72
2 Bank of America Merrill Lynch (BAML) 6,901 20 10.32
3 JP Morgan 4,776 10 7.14
4 Credit Suisse 4,718 9 7.05
5 Lloyds Bank 4,420 14 6.61

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1 Wells Fargo Securities 68,611.22 170 11.38%
2 Bank of America Merrill Lynch 59,056.08 169 9.80%
3 JPMorgan 56,861.85 163 9.43%
4 Citi 56,521.05 165 9.38%
5 Credit Suisse 44,888.95 123 7.45%