Credit Suisse and Bear Stearns are leading a $345 million credit for Panavision, which the company is using to refinance a $135 million term loan put in place in February 2004. JPMorgan led that credit (LMW 02/27/05). MacAndrews & Forbes Holdings is the majority shareholder. The deal is made up of a five-year, $35 million revolver; a five-year, $195 million term loan "B" and a six-year, $115 million second-lien term loan. Pricing on the first-lien facilities is LIBOR plus 3% while the second-lien comes in at LIBOR plus 7%. The deal launched following a bank meeting on March 15.
Some investors with long memories are wary about dealing with the company. In late March of 2002, JPM and Citigroup launched a $430 million refinancing package for Panavision that consisted of a $250 million bond offering and $180 million in bank debt. Two weeks later, Panavision unexpectedly shelved the note offering, citing market conditions. The bank deal went through, but some investors felt burned. "If you were in that, you got hosed," an investor said.
Another buysider said there could still be some hard feelings. "The company seems to be doing well for itself and it has the confidence of the ratings industry with this new credit," he said. "Of course pricing is going to be a factor, but for people that felt duped by them [previously], they might be holding a grudge so to speak or they may not feel comfortable with them." But in this market, memories can grow short, a third investors noted. "You have to keep that [situation] in mind, but need to look at this deal on its own merit," he reasoned. "They are a fairly decent company and the credit could be decent. You need to evaluate it and not make a decision whether or not you like it [based] on them pulling back notes a few years ago," he explained. A spokesman at Panavision declined to comment and Robert Beitcher, president and ceo at Panavision, did not return calls.
Moody's Investors Service rated the revolver and term loan B1 and the second-lien term loan B3. Additionally, Moody's has upgraded the company's corporate family rating from Caa2 to B2, citing a strengthened liquidity position and limited amortization on the debt until 2011.