Wellman Aims To Raise Ratings

  • 13 Jul 2003
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Polyester product manufacturer and marketer Wellman completed a $275 million credit that is unsecured until March 2004, at which time the company will have to provide security for the deal unless it can get its ratings back up to investment-grade. The company's ratings are presently at BB+/Ba2, said Keith Phillips, cfo of Wellman. The company hopes that with the consummation of an equity investment by private equity firm Warburg Pincus, it will be able to push itself above the investment-grade edge again, Phillips explained.

In conjunction with the credit, Shrewsbury, N.J.-based Wellman completed a sale of $126 million of perpetual convertible preferred stock and warrants to Warburg Pincus. The warrants sale allows Warburg Pincus to buy 2.5 million shares of Wellman's common stock. Wellman was required to obtain a credit for at least $175 million in order to complete the transaction, Phillips said. But positive reception from the lenders pushed the deal up to $275 million, he added.

The three-year revolver's pricing is in the LIBOR plus 2% range and is based on a grid tied to ratings. Phillips said pricing on the new facility is higher and the covenants are tighter than before because of the ratings downgrade and a tightening in the bank market. Pricing for the previous deal that was put in place in 1999 was in the LIBOR plus 1% range. J.P. Morgan and FleetBoston Financial lead the new deal. Fleet was on the left leading Wellman's previous facility, but J.P. Morgan took the reigns on the new deal as the syndication agent, Phillips said. "They are both longtime relationships," he said. Deutsche Bank, Credit Lyonnais, National City Bank, Fortis Bank and ABN Amro joined the credit after doing other non-loan business with Wellman, he explained, while Citizens Bank, Sovereign Bank, Fifth Third Bank and Key Bank are completely new relationships.

  • 13 Jul 2003

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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%