Rayovac Corp.'s $540 million "B" loan was seen trading north of 101 1/2 despite a spread of just LIBOR plus 2%. The bank deal, which also includes a six-year $300 million revolver, a seven-year, $140 million euro-denominated "B" loan and a seven-year C$50 million "B" loan, was very well oversubscribed, said a lender. The revolver is priced at LIBOR plus 2 1/4% and the European debt at 2 1/2% over LIBOR.
The banker added that the U.S. "B" tranche was initially pitched at a Jan. 10 bank meeting as $740 million. The bank debt was decreased and $500 million of senior subordinated notes were increased by $200 million to $700 million, pricing at 7 3/8%.
The financing backs battery-maker Rayovac's $1.3 billion acquisition of pet and garden products company United Industries Corp. Bank of America is lead arranger on the credit with Citigroup and Merrill Lynch as co-arrangers (LMW, 1/7).
"There was a lot of demand. It's a good, well-known piece of paper and investors appreciated the company was diversifying away from the battery business and into the lawn and garden care market," he said. The buyers were a mix of collateralized loan obligations, funds and banks and pieces were sold overseas. Rayovac was looking for a global institutional investor base. Nancy O'Donnell, v.p. of investor relations, did not return calls relating to the trading levels, but previously commented that Rayovac has worked on a number of transactions with B of A. The new debt also refinances both United's and Rayovac's existing debt.