Oversubscription Leads To A Reworked Lear Deal

Demand allowed the lead banks for Lear Corp. to rework the auto supplier's financing package, moving money into a lower-priced term loan and eliminating the company's second lien all together.

  • 21 Apr 2006
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Demand allowed the lead banks for Lear Corp. to rework the auto supplier's financing package, moving money into a lower-priced term loan and eliminating the company's second lien all together. The deal was also increased by $200 million. The new structure is a six-year, $1 billion term loan priced at LIBOR plus 2 3/4%.

When JPMorgan, Bank of America, Citigroup and Deutsche Bank first brought the financing to the market in early April, it consisted of a $600 million term loan "B" and a $200 million second lien. Price talk was LIBOR plus 3% on the "B" loan and LIBOR plus 4 1/2%-4 3/4% on the second lien (CIN, 4/7).

A Lear spokesman would only say that, "We're pleased that it is being well received."

Prior to the deal being reworked, Standard & Poor's assigned a B+ rating and a 2 recovery rating to the term loan. The ratings agency says the speculative-grade rating reflects the company's distressed operating performance caused by tough industry pressures.

  • 21 Apr 2006

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1 BNP Paribas 15,256 32 16.83
2 Bank of America Merrill Lynch (BAML) 10,179 30 11.23
3 Citi 9,751 23 10.76
4 Lloyds Bank 7,329 24 8.09
5 JP Morgan 6,580 10 7.26

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4 RBC Capital Markets 251.51 1 10.52%
4 MUFG 251.51 1 10.52%