Securitization People and Markets

Merrill Lynch Capital and Citigroup last week offered more bait to lure investors into Carlyle Management Group's $325 million acquisition credit for Breed Technologies, but tickets still came up short. The lead banks cut the size of the deal, threw in an original issue discount and boosted the coupon, but were still looking at a post-close selldown as they moved to wrap up the deal last Friday. The credit had to close and fund last week for the acquisition of the airbag, steering wheel and seat belt company to stay on schedule.

Oxford Health Plans' $450 million credit oversubscribed last Thursday after Bank of America and Credit Suisse First Boston added a 25 basis point upfront fee to the $400 million "B" loan. A banker familiar with the situation said the deal attracted more than 35 ticket holders with pricing on the $400 million "B" loan set at LIBOR plus 23/4%. The banker said the six-year loan landed at the high end of the initial LIBOR plus 21/2-23/4% price talk because of investors' demands for the rate. The five-year, $50 million revolver--priced at LIBOR plus 21/4% with a commitment fee of 50 basis points--was oversubscribed, he added. Gary Frazier, senior v.p. of investor relations at Oxford Health, declined to comment.

A $1.25 billion power loan for Richmond, Va.-based Dominion has hit the market using base pricing derived from traded bonds, according to sister publication Power, Finance & Risk. Syndication for the facility was launched last Tuesday by leads J.P. Morgan and Barclays Capital. Instead of adopting the standard LIBOR plus a fixed basis point spread, the drawn pricing on the facility will be LIBOR plus the average asset swap spread on a defined publicly traded bond. That spread will be determined by getting market dealer quotes on the bonds. Calls to J.P. Morgan were not returned. Officials at Barclays declined comment and Dominion spokesman Mark Lazenby was unable to provide comment by press time.

Van Kampen Funds is looking to fold its Senior Floating Rate Fund into its Prime Rate Income Trust and rename the combined fund, the Van Kampen Senior Loan Fund. The firm wants to merge the smaller $265 million Senior Floating Rate Fund into the $2 billion Prime Rate Income Fund to reduce operating expenses, according to a Van Kampen spokeswoman. Since both funds have similar investment strategies, it makes sense to merge the smaller portfolio, she said. "The Board anticipates that shareholders will benefit from a reduced overall operating expense ratio in the combined fund as well as increased diversification of assets," according to a filing with the Securities and Exchange Commission.

Deutsche Bank and UBS Warburg filled out the $500 million "B" loan for Amphenol less than a week after launch despite some grumblings from investors that the deal would need higher pricing and more than stock-security to sell the credit. The seven-year term loan is priced at LIBOR plus 21/2%. "People did raise [the security] as an issue, [but] people got over it," said a banker familiar with the deal. He said a chunk of buysiders did shy away from the deal, but there was still a good amount that invested.

Ethyl Corp.'s $115 million "B" term loan oversubscribed last week after Credit Suisse First Boston and UBS Warburg increased the spread from LIBOR plus 4% to LIBOR plus 41/2%. A banker said syndication had been moving somewhat slowly after launching on April 2, with investors raising concerns over both security and pricing. But after the pricing boost and some added amortization, about 20 investors were expected to sign onto the credit. One source said BlackRock and Conseco were close to investing in the credit, but officials at both firms declined comment. The deal includes a $50 million revolver with a spread of 31/2% over LIBOR. The banker said the revolver was still waiting on more commitments, but he expected it to fill out this week. Bankers at CSFB and UBS declined comment.

C&D Technologies is talking to banks about the refinancing of a $220 million credit facility that expires in March 2004. Bank of America leads C&D's current deal, but Stephen Markert, C&D cfo, said he did not know if the bank would remain as the lead on a new facility. C&D is shopping the loan and is being approached by other banks. He explained that C&D is looking for a lead that will not only form a good relationship, but also bring the best proposal. "Clearly, pricing will be very important," he said. Markert declined to comment on the banks that the company is considering. A B of A spokeswoman declined comment.

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UBS Warburg and Deutsche Bank hit the market last Thursday with a $750 million refinancing credit for cable and communications products provider Amphenol. The deal comprises a seven-year, $500 million "B" loan priced at LIBOR plus 21/2% and a five-year, $125 million revolver and $125 million "A" piece at a spread of 2% over LIBOR. A banker familiar with the deal noted that the new term loan sports a better premium than the company's existing $375 million "B" piece, which is priced at LIBOR plus 11/2%. The existing credit also includes a $310 million "A" loan and $150 million revolver priced at LIBOR plus 3/4%. Deutsche Bank leads this credit with J.P. Morgan and Bank of New York also acting as top tier lenders. A UBS official declined to comment. A Deutsche Bank banker did not return calls.