After a sub-par showing during its first launch this summer, Precision Partners has re-entered the market with a completely reworked structure. A price bump has led to a fully subscribed second lien, but a price increase and a 98 original issue discount on the first lien has not helped to fill the book, according to market players.
Matawan, N.J.-based Precision jumped into the market to refinance existing debt in July, but the banks reworked the deal in August, a banker explained. He declined to comment on the exact reasons why it was reworked. The company previously refinanced its debt in October 2004, but the amount of existing debt could not be determined.
The new $286.5 million deal is slightly smaller than the $330 million one that was originally launched by Lehman Brothers, Jefferies Finance and CIT Group. The deal was re-launched by the trio on Sept. 20 and the only thing that wasn't touched was the $25 million first-lien revolver. The term loan "B" was increased to $169 million from $140 million; the U.S. denominated term loan going out to Canadian borrowers was decreased to $22.5 million from $30 million; the delayed-draw term loan was cut to $10 million from $45 million and the second lien was cut by $20 million to $60 million and is already fully subscribed, according to a banker.
Pricing also saw an increase on the reworked deal, which was originally launched at LIBOR plus 2 3/4% on the first lien and LIBOR plus 6 1/4% on the second lien. The reworked first lien is now priced at LIBOR plus 3% with a 98 OID, the delayed-draw term loan has an undrawn fee of 100 basis points and the second lien is priced at LIBOR plus 7 1/4%. Despite the extra incentives, one investor said the banks are still struggling to fill the first lien.
Precision Partners is a global manufacturing and engineering-services company owned by GSC Partners. Calls to Robert Vander Meulen, cfo, were not returned by press time.