UBS is in the market with bank deals backing JLL Partners' leveraged buyout of CHI Overhead Door and the $768 million acquisition of Horizon Natural Resources Company by International Coal Group. International Coal Group was formed by an investor group led by Wilbur Ross' WL Ross & Co., Contrarian Capital Management, Greenlight Capital, Stark Event Trading and Varde Partners. Ross came into the situation after the other investors brought him in. "They invited us into the deal because we are staffed-up to put deals together and make them happen," said Ross.
UBS is sole lead arranger for the bank debt, which consists of a $155 million term loan priced at LIBOR plus 3% and a $50 million revolver at LIBOR plus 2 3/4%. There is also a $40 million synthetic letter of credit facility, said a banker. GE Capital is documentation agent. Two weeks ago Ross angered Third Point Capital and Jana Partners by taking a $3.75 million fee in undervalued equity for arranging $125 million in junior debt (LMW, 10/4). One portfolio manager looking at International Coal said the main issue for his shop is what the fundamentals in the coal industry are.
The $145 million CHI financing consists of a $20 million revolver, $95 million first-lien and a $30 million second-lien loan. Pricing on the three tranches is LIBOR plus 3%, LIBOR plus 3 1/2% and LIBOR plus 8%, respectively. There is also call protection of 102, 101 on the second-lien said a banker. She said ratings are B2/B on the first-lien and B3/CCC+ on the second-lien. The EBITDA of the company is $28.4 million on sales of $120 million. Total leverage is 4.5 times. CHI manufactures overhead garage doors. A UBS banker declined comment.