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C&A Breaks After Bond Pricing Lifts Spread

02 Sep 2004

Collins & Aikman Products Co.'s $400 million "B" loan broke in the 100 7/8-101 1/4 context last week and changed hands around that range.

Collins & Aikman Products Co.'s $400 million "B" loan broke in the 100 7/8-101 1/4 context last week and changed hands around that range. The loan has a spread of LIBOR plus 4% and is guaranteed by Collins & Aikman Corp., the parent company. The "B" loan was originally priced at LIBOR plus 3 1/4%, but two weeks ago the auto-parts manufacturer sold $400 million of 13 5/8% notes. The pricing of the bonds came higher than expected and moved the bank debt spread up, said a trader.

J.P. Morgan, Credit Suisse First Boston and Deutsche Bank lead the deal, which also includes a $150 million revolver and a $125 million, five-year revolver. The revolvers are priced at LIBOR plus 3% and LIBOR plus 3 1/4%, respectively. The new facility is refinancing the company's existing $625 million facility set to expire by the end of next year. The new bonds redeemed $400 million of 11 1/2% notes due in 2006.

Meanwhile, OSI Industries' $450 million "B" loan allocated and traded in the 100 3/4-101 1/8 context. The meat-processor's bank debt is led by Bank of America and has a spread of LIBOR plus 2 1/4%. The price was originally set at LIBOR plus 2 1/2%, but after being oversubscribed, the price was trimmed, a trader said. OSI's deal also includes a $250 million revolver. George Krzesinski, OSI's cfo, did not return calls.

02 Sep 2004