Citibank is syndicating a $615 million credit for AM General Corp., a manufacturer of military and special purpose vehicles including the HUMMER and Humvee. The company is currently owned by Ira Rennert's Renco Group, which has entered into a contribution partnership agreement with Ron Perleman's MacAndrews & Forbes Holdings, a market participant said. The agreement will give control to MacAndrews although Renco will have a minority interest in the company but no management role, he added.
The credit comprises a five-year, $50 million revolver; seven-year, $400 million first-lien "B" loan; and seven-and-a-half year, $165 million second-lien "C" loan, the market player noted. Price talk is LIBOR plus 3% on the revolver and "B" loan and LIBOR plus 5 1/4% on the "C" loan. Syndication launched last Wednesday. Citi bankers declined comment. Paul Cafiero, AM General's cfo, and officials from Renco and MacAndrews did not return calls.