UBS Warburg managed to oversubscribe the "B" tranche of its deal for Neptune Technologies, despite gripes from some investors that pricing on the deal was not high enough to garner support. A UBS syndications banker said 19 institutions came in on the $125 million tranche, oversubscribing the piece by a little more than $100 million right before the Thanksgiving holiday. He said the bank expected to do final allocations by the end of last week with commitment sizes ranging between $10-15 million on the deal that had leverage issues raising concern among investors. "It's a small deal but those who did their homework were able to get around it," he said, noting that the leverage multiple of 3.8X on the deal was a tough hurdle for some along with the small size of the deal. "It's a pretty defensive business," he added. Another banker noted that stable operating results won out over leverage concerns with an institutional market looking to invest cash.
Some buysiders said they were looking for a price increase on the deal while others were concerned with the all-senior structure (LMW, 11/26). But despite concerns, UBS was able to get the deal done as originally structured at LIBOR plus 3 1/2%, said the banker. The credit is comprised of a $30 million revolver and a $35 million "A" term loan, which both have five-year maturities. Commitments to the pro rata deck received 1% and those commiting to the institutional round will receive 3/4%.