Bank of America and JPMorgan are in the market with a $3.5 billion senior secured credit facility for Oshkosh Truck. The deal comprises a $500 million revolver, a $400 million "A" term loan and a $2.6 billion term loan "B." Pricing on the pro rata is LIBOR plus 2% and pricing on the term loan "B" is LIBOR plus 2 1/4%.
Syndication of the deal launched last Thursday at a well attended bank meeting, according to market sources. The financing will be used by Oshkosh to acquire McConnellsburg, Pa.-based JLG Industries for approximately $3.2 billion. On Oct. 16 Oshkosh announced it would acquire the producer of aerial work platforms and telehandlers for $28 per share. The company came to market in 2001 for a $140 million term loan "B" add-on to its existing B of A credit (LMW, 7/8/2001). Calls to David Sagehorn, Oshkosh treasurer, were not returned.
Moody's Investors Service rated the credit Ba3 citing the company's financial strength but eroding credit metrics after the acquisition. Pro forma for the transaction, debt to EDITDA leverage will be about 4.6 times, according to Moody's. Standard & Poor's rated the deal BB with a 2 recovery rating. Oshkosh, Wis.-based Oshkosh Trucks is a designer, manufacturer and marketer of specialty fire, emergency and military vehicles and bodies. Calls to a JLG spokeswoman were not returned.