Lehman Juices Up Pricing To Fill USIS Deal

  • 22 Dec 2002
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Lehman Brothers flexed up pricing last Monday for the $350 million credit backing the buyout of US Investigations Services (USIS). A banker stated that the line filled a few days later, but this could not be confirmed by press time. The facility was half subscribed just before the pricing increase, according to another banker familiar with the deal. The $225 million "B" loan was flexed up to LIBOR plus 4% from LIBOR plus 33Ž 4%, while pricing on the pro rata, consisting of a $75 million "A" loan and $50 million revolver, was upped to LIBOR plus 31Ž 2% from LIBOR plus 31Ž 4%. The institutional piece also has a 1% original issue discount increased from 1/4%, the banker added. A Lehman official declined to comment.

Proceeds from the facility will go toward the $981 million purchase of Annandale, Penn.-based USIS by Welsh, Carson, Anderson & Stowe,The Carlyle Group and management. Welsh, Carson is contributing $380 million in equity toward the balance of the purchase price, while Carlyle is committing $122 million in roll-over equity. The management is supplying $28 million. Welsh, Carson is also providing $165 million in senior notes that will be subordinate to the credit facility.

The background and security services provider was initially owned by its employees as part of a 1996 government privatization program, with Carlyle taking a 25% stake in 1999, that increased to a 30% stake. However, after the acquisition, Welsh, Carson will own a 60% share in the company, while Carlyle will hold roughly 15-20% and the management will take most of the remainder. Calls to USIS and Welsh, Carson were not returned.


  • 22 Dec 2002

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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
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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%