Investors are expecting a price cut this week on the $790 million credit facility for Yankee Candle. The Lehman Brothers-led deal consists of a $125 million revolver and a $665 million term loan, both currently priced at LIBOR plus 2 1/2%. The bank is also marketing $300 million of eight-year, 9% senior secured bonds and $225 million of 10-year, 10% senior subordinated notes. Pricing is expected to tighten on those as well.
"The business has been around for awhile, people in the market know it," said one portfolio manager. The financing is being used by Madison Dearborn Partners to take the South Deerfield, Mass.-based designer, manufacturer and retailer of candles private for approximately $1.7 billion, including assumed debt. The amount of Yankee Candle's existing debt could not be determined. Bruce Besanko, cfo, was out of the office and could not be reached. Calls to a Madison Dearborn representative were not returned by press time.