Securitization People and Markets

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.

Pricing on the four-year, $400 million "B" loan for International Steel Group (ISG) is likely to be in the LIBOR plus 31/2% to 33/4% range after the credit received split ratings of Ba2/BB+ from Moody's Investors Service and Standard & Poor's (see story, page 7). Pricing on the two-year bullet $300 million "A" loan is expected to be in the LIBOR plus 3% to 31/2% range, while the $300 million three-year revolver will price at LIBOR plus 23/4%, said a banker. Retail syndication will kick off on Wednesday, he added. Goldman Sachs, UBS Warburg and CIT Group lead the $1 billion asset-based bank facility, which backs the $1.5 billion acquisition of Bethlehem Steel. CIT is collateral agent and will monitor the borrowing base and run all the metrics, explained the banker.

Wachovia Bank has taken over the lead role from Fifth Third Bank to refinance and increase the bank debt of Latrobe, Pa.-based Le Nature's. Wachovia is providing a $200 million bank facility for the beverage producer. The new line comprises a $40 million revolver, a $125 million "A" loan and a $35 million capital expenditure facility, with pricing set at LIBOR plus 41/2%. The refinancing replaces existing debt and expands the facility, said John Higbee, cfo at Le Nature's. Higbee declined to disclose the size or pricing of the previous loan, but he said, "We're adding to our plants all the time."

The acquisition credit for Carlyle Management Group's acquisition of Breed Technologies on behalf of Key Automotive Group is still presenting a tough sell, as investors eye auto-sector deals with caution. Merrill Lynch Capital and Citibank have already altered pricing and the structure of the credit, carving a $50 million, six-year silent lien "C" loan out of the senior debt and pricing it at LIBOR plus 10%. The $210 million "B" is priced at LIBOR plus 41/2% and the $100 million revolver is priced at LIBOR plus 4%. Michele Kovatchis, the banker at Merrill working on the deal and a Citibank spokeswoman declined comment. Prior to the changes the credit consisted of a $110 million revolver and a $250 million "B" piece.

Bank of America held a bank meeting last week for Stewart Enterprises to increase its "B" level debt by $50 million for the redemption of its Remarketable Or Redeemable Securities (ROARS). The Metairie, La.-based funeral home and cemetery operator is expected to redeem the $99.9 million outstanding ROARS in May and the company wants to have the additional "B" debt rather than use its revolver exclusively, according to Martin de Laureal, v.p. of investor relations for Stewart. The company has availability under its $175 million revolver to fund the ROARS redemption, but by tapping the "B" market the company will enhance its liquidity after the transaction and will still have $70 million on the revolver rather than $20 million, he noted.

Allied Waste Industries will be launching a $3 billion refinancing deal to retail this Wednesday and market players are eyeballing the $1.5 billion "B" piece's LIBOR plus 31/2% coupon. While the question was raised of whether pricing was aggressive enough to attract enough interest, bankers and investors said the name was too big and too liquid to be passed up by investors. J.P. Morgan and Citibank are leading the credit with UBS Warburg, Credit Suisse First Boston and Deutsche Bank also acting as top tier agents. Bankers on the deal either declined to comment or did not return calls.

Credit Suisse First Boston and Citibank pitched Laidlaw's $825 million bank debt exit financing to investors last Thursday as the company makes plans to emerge from bankruptcy this month. The deal includes a five-year, $525 million "B" piece with price talk in the LIBOR plus 31/2% range and a six-year, $300 million revolver priced at LIBOR plus 3%. A commitment fee of 50 basis points is also being offered on the revolver. A $350 million bond deal is also coming to market as part of the exit financing. Laidlaw, a school and inter-city bus company, filed for Chapter 11 in June 2001. Investors said the deal could be attractive, considering Laidlaw's stable transportation business. CSFB and Citi bankers and Geoff Mann, treasurer and v.p. of Laidlaw, did not return calls.

Bank of America and Credit Suisse First Boston are shopping a $450 million credit for Oxford Health Plans with the proceeds from the term loan funding a $208 million obligation on a $225 million settlement for a class action lawsuit. The new bank debt will also refinance $120 million of existing debt. The BB+ rated credit was launched to the market on April 1, a banker said. The $50 million, five-year revolver is priced at LIBOR plus 21/4% with a 50 basis point commitment fee, while the six-year, $400 million term loan has a spread of LIBOR plus 21/2-3/4%.