The pricing on Coinmach Services Corp.'s $570 million term was sliced 25 basis points on the back of oversubscription. There is a further 25 basis points step down if the company hits a certain leverage level or ratings benchmark. Deutsche Bank and JPMorgan brought the $75 million revolver and $570 million term loan to market Nov. 17. Pricing had been set at LIBOR plus 2 3/4% on the term loan and LIBOR plus 3% on the revolver. Pricing on the revolver did not change.
Bob Doyle, senior v.p., cfo, treasurer and secretary, said the deal is going well because of the company's steady cash flow. "We've been with the same bank group for a long period of time, so I think most of the investors know the company very well and that helps us," he said. "For the investors, a company with stable cash flows and long term contracts is a good thing for places they want to loan money."
The term loan will be used to refinance about $230 million of existing term debt, with the rest retiring about $320 million of 9% senior notes due 2010 (CIN, 11/21). With the approaching Feb. 1 callable date, Doyle said now was the right time to access the bank market. GTCR Golder Rauner is a majority investor in the company.
Moody's Investors Service assigned a B2 rating to the deal. Standard & Poor's assigned a B rating to the loans. The laundry equipment services company is headquartered in Plainview, N.Y. and has three operating companies: Coinmach, Appliance Warehouse of America and Super Laundry.