Six banks launched syndication of a refinancing last Tuesday for the London-based, Invensys. The European deal contains a £190 million strip of bonding and a term loan, led by Deutsche Bank, which is being marketed in the states. The U.S. portion is split between a £100 million term loan "A" and a £90 million "A" bonding facility. Pricing is LIBOR plus 2 1/4% on both.
The European tranches include a multicurrency £150 million revolver; a £50 million European "B" term loan; a £75 million "B" bonding facility; a £35 million "C" bonding facility and a £200 million "D" bonding facility, which is undrawn. Pricing is LIBOR plus 2 1/4% on all of these tranches, except for the term loan "B," which is priced at LIBOR plus 2 1/2%. A banker said the lead banks created a bonding facility because the "bonding needs are very high because they do a lot of contractual work."
Bank of America, Deutsche Bank, HSBC, Lloyds, Morgan Stanley and Royal Bank of Scotland are the lead arrangers across the facility. An Invensys spokeswoman said the company chose banks it wants to work with going forward. "They were looking for a balance of syndicate of U.S. and U.K. blue chip banks."
In May the company announced a rights issue of up to 2,276 million new shares, which will be used to repay 35% of the company's outstanding high-yield bonds, about £243 million. The Extraordinary General Meeting (EGM) passed the resolution last Wednesday. It will repay and cancel £113 million the amount outstanding on its term loan due 2009; repay and cancel £25 million outstanding on its bonding facility due 2009; and repay and cancel £277 million outstanding on its second lien loan facilities due 2009.