Bank of America, GE Capital and Deutsche Bank last week launched syndication of a refinancing deal for Ashtead Group. The British equipment rental company does most of its business in the U.S. through its Sunbelt Group subsidiary. The five-year, $675 million asset-based deal comprises a $275 million term loan and $400 million revolver, a banker said. Both tranches have grids attached to them, but initial pricing is LIBOR plus 2 3/4%. There is a 3/8% unused fee on the revolver.
The credit refinances existing debt led by B of A and outstanding debt under the accounts receivable securitization. Each of the three lead arrangers underwrote $225 million, the banker noted. Ashtead's debt had been stressed for some time, one portfolio manager noted. "They ended up doing 11% bonds and are now doing it as a borrowing base type concept," he explained. Bids for Ashtead's loan tumbled in the low 50s last year after accounting problems were discovered at Sunbelt and the company subsequently defaulted on its bank loan (LMW, 2/9).
The company later reached an agreement with its banks to waive the defaults. Sunbelt has performed strongly since as non-residential construction activity has grown. In addition, the company has benefited from the clean up required from hurricanes Charley, Frances and Ivan. Officials from B of A, GE and Deutsche Bank either declined comment or did not return calls. Ian Robson, Ashtead's finance director, was traveling and could not be reached.