Pricing onBoise Cascade's $1.33 billion "B" loan has been reduced 50 basis points to LIBOR plus 1 3/4% and could go down to 1 1/12% if the company improves it credit rating to BB/Ba2. The bank loan is currently rated BB/Ba3. "[Moody's Investors Service] is currently one level below [Standard & Poor's] so if Moody's upgrades them then they would have a four-b flat rating," a trader said. J.P. Morgan led the repricing. The company has also filed for an initial public offering later this year.
The company's "B" loan is part of the financing backing Madison Dearborn Partners' $3.7 billion acquisition of the business from Boise Cascade Corp., which originally also included a $1.225 billion "C" loan and a $400 million revolver. The "C" loan has been repaid with proceeds from the sale of 2.2 million acres of timberland to Forest Capital Partners for $1.65 billion (LMW, 1/31). Goldman Sachs, J.P. Morgan, Deutsche Bank and Lehman Brothers will lead the IPO, with half the proceeds of the IPO slated to pay down debt. A Boise spokeswoman declined comment.