Morgan Stanley Launches Deal For IPS Buyout

Morgan Stanley last week launched syndication of a $102 million senior secured credit backing the buyout of IPS Corp. by Fremont Partners and management.

  • 30 Jun 2006
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Morgan Stanley last week launched syndication of a $102 million senior secured credit backing the buyout of IPS Corp. by Fremont Partners and management. The credit will also pay down existing debt. The deal consists of a six-year, $20 million revolver and seven-year, $82 million term loan. Pricing is LIBOR plus 2 1/4% on both tranches. Syndication is said to be going well, according to a banker. The financing also includes $100 million of senior subordinated notes due 2014.

Standard & Poor's assigned a B+ rating with a 1 recovery rating. The ratings agency said that pro forma for the transaction, IPS will have total debt of $183 million, including capitalized operating leases, and pro forma debt to EBITDA of 5.4 times as of June 30. Moody's Investors Service assigned a B1 rating.

An executive at IPS could not be reached for comment. Based in Compton, Calif., IPS is a pipe adhesive and plumbing product manufacturer.

  • 30 Jun 2006

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
2 Citi 4,288 14 10.60
3 Rabobank 2,633 4 6.51
4 Goldman Sachs 2,615 4 6.46
5 Barclays 2,603 8 6.43

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1 Bank of America Merrill Lynch 57,945.74 181 12.35%
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