Goldman Sachs and J.P. Morgan filled the eight-year, $305 million "B" term loan for Berry Plastics at a comparatively tight spread of LIBOR plus 3 1/4 % last week. In fact, the "B" piece was well oversubscribed, with a number of new investors piling into the deal, according to one banker. She noted that it is still too early to say whether pricing on the deal will be flexed. Calls to Goldman and J.P. Morgan officials were not returned.
One buysider said the pricing already is well below other single-B names that have come to market recently, such as Herbalife International and Columbia House. In addition, total leverage appears to be high at 5.2 times, but he noted that the plastics business is a good one.
The "B" loan is part a $455 million credit facility backing the $837.5 million acquisition of Berry by GS Capital Partners 2000. The private equity fund is purchasing the company from a partnership between J.P. Morgan Partners, First Atlantic Capital and Aetna Life Insurance. Ira Boots, president and ceo of Berry, said the Goldman fund intends to continue the company's growth strategy, which includes acquisitions (LMW, 6/3).
In addition to the "B" tranche, the $455 million facility includes a six-year, $100 million revolver and a six-year, $50 million delayed-draw term loan. The pro rata is still being shopped, and $15 million commitments to the revolver get 75 basis points, the banker said. The remainder of the acquisition will be financed with a $275 million offering of 10-year senior subordinated notes.