Securitization People and Markets

Citigroup was scheduled to launch syndication last Thursday of a $200 million credit backing Cross Country Healthcare's $104 million cash acquisition of nurse staffing business Med-Staff. The credit for the healthcare-staffing company includes a six-year, $125 million "B" loan priced at LIBOR plus 31/2% and a five-year, $75 million revolver with a spread of 3% over LIBOR. A Citi official declined to comment on the deal. Emil Hensel, cfo of Cross Country, confirmed the structure for the underwritten deal and said Wachovia Securities was set to join as a co-lead as of late last week. He noted that Citi leads the existing credit, pointing to the selection of the bank to arrange the new facility. The existing deal is priced at LIBOR plus 15/8%. Cross Country expects existing lenders to join the new deal, Hensel noted.

Goldman Sachs is reported to have won the bidding to provide a $300 million loan to The Mills Corp. for its $435 million purchase of the Del Amo Fashion Center in Torrance, Calif, according to sister publication Real Estate Finance & Investment. Goldman had a leg up as it marketed the massive property on behalf of seller Guilford Glazer. Officials at the Arlington, Va.-based real estate investment trust were in Spain for the opening of Madrid Xanadu and could not be reached while David Douglass, director of corporate communications at Mills did not return calls. Officials at Goldman also did not return calls for comment.

The five-year, $150 million "B" loan for PacifiCare Health Systems was oversubscribed last week after J.P. Morgan and Morgan Stanley pitched the $300 million refinancing deal to investors with spreads of LIBOR plus 31/2% on the institutional piece and LIBOR plus 31/4% on the three-year, $150 million revolver. The rates are cheaper than those that the commercial health plan and Medicare HMO provider received for its deal in 2001. That credit was priced in the LIBOR plus 5% range after leads Morgan Stanley and Bank of America had to juice up the interest rate because of investors' concerns over management's ability to reduce cost issues.

As bigger M&A deal flow moves at a snail's pace these days, middle-market leveraged buyout credits are swamping the bank debt arena. Buyout firms are pushing the leverage envelope, given the improved availability of financing, said David Horing, managing director at private equity firm American Securities Capital Partners. "The market has improved and it's possible to get greater levels of debt financing than six [to 12 months ago]," he said. Recently closed middle-market LBO credits include Oreck Corp., Breed Technologies and ILC Industries, while new deals Medex and Pure Fishing are in syndication.

The $170 million "B" loan for Werner Ladder was three times oversubscribed last week, according to market players. Citigroup and J.P. Morgan are shopping the credit. Bankers did not indicate any changes to the LIBOR plus 31/4% price talk for the six-year institutional piece. "The revolver is doing fine," said one banker who would not confirm if it was fully subscribed yet. The five-year, $60 million revolver is priced around LIBOR plus 3%. Proceeds from the credit and from a sale of company stock to Leonard Green & Partners are to refinance the company's existing credit and to help redeem $150 million in common stock (LMW, 5/12). Majority shareholder Investcorp will keep a 51% stake in the company after the recapitalization plans are completed. A Citi official declined to comment, while calls to J.P. Morgan bankers and Larry Friend, Werner's v.p., cfo and treasurer, were not returned.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.