Houses Of Morgan Rejig, Rollup Steel Dynamics Deal

  • 17 Mar 2002
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Morgan Stanley and J.P. Morgan have filled the book on the $350 million deal for Steel Dynamics after a $200 million, seven-year senior subordinated bond offering and a shift from the pro rata to the "B" overcame some market reluctance. A banker said the "B" tranche was taken up by $30 million to $205 million while the $175 million pro rata dropped by $30 million. Pricing and the tenor on the bank debt stayed the same, he said. "Steel is not everybody's cup of tea," he noted.

The pro rata carries a LIBOR plus 31/ 4% spread and the "B" is LIBOR plus 33 /4 %. The $200 million bond offering was priced at 91 /2 %, the banker noted, which on a relative value basis is pretty tight with the loans. About 25 institutions signed on board, including GE Capital, which bought the loan from Mellon Financial, the previous lead (LMW, 3/4). Tracy Shellabarger, v.p. and cfo for Steel Dynamics, did not return calls.

  • 17 Mar 2002

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1 Bank of America Merrill Lynch (BAML) 4,755 19 11.75
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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5 Credit Suisse 25,010.27 80 5.33%