Flexi-Van Deal Allocates After Adjustment

  • 19 Sep 2002
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The $475 million Flexi-Van credit led by Fleet Bank and Scotia Capital is being allocated this week and will move into the secondary market next week after adjustments were made to the structure. The $325 million revolver was downsized by $25 million to $300 million with a commensurate increase on the $100 million "B" term loan to $125 million, a banker noted. The credit refinances existing debt and backs the Kenilworth, N.J., company's $180 million acquisition of the chassis leasing businesses of GE Capital's TIP unit, he added. Pricing is LIBOR plus 2 1/4% on the three-year revolver and LIBOR plus 3% on the five-year "B" loan, with a 1/8% upfront fee on the "B."

The deal has solid sponsor support from David Murdock, who also owns Castle & Cooke, said a banker familiar with the deal. One buysider commenting on the debt said during syndication, "It's high margin, fairly stable and predictable, but the leverage is 4.2 times, all senior." But the banker, however, disagreed. "It sounds high, but for a leasing company, it is not out of the realm," he contended (LMW, 9/2). Flexi-Van supplies transport equipment, which comprise wheel trains for containers. "The units last for 20 years, and it's a pretty simple business," another banker said. There are low capital expenditure requirements, as maintenance of the fleet is up to the lessee. A Scotia Capital banker declined to comment. Calls to officials at Fleet and Flexi-Van were not returned.

  • 19 Sep 2002

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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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