Wachovia Securities has retooled the structure of AXIA's proposed credit facility by reducing the cash dividend to sponsors, decreasing the "B" loan by $10 million, reducing the subordinated debt and instead using a holding company payment-in-kind note. One loan investor said the changes were based on lack of sufficient response. "Their current deal is not going to fly--they have got to put something in place that will." The credit first hit the market May 12.
Lyle Feye, AXIA's cfo, declined comment and Wachovia bankers did not return calls. Dominick D'Ascoli, an analyst with Standard & Poor's, declined to comment on the previous structure, but said, "The new structure that they came up with is better."
The deal now comprises a $20 million revolver; $130 million "B" loan; $65 million privately placed subordinated note; and $20 million of 13 1/2% PIK notes. Price talk on the new bank facility could not be determined. The original bank deal, a $20 million revolver and $140 million "B" loan, went out to investors at LIBOR plus 3 1/2%, but the institutional piece flexed up to LIBOR plus 4% before the structure was changed. The revolver will be undrawn at closing.
Proceeds from the bank deal and notes will be used to refinance $134 million of existing debt and pay a $75 million dividend to Cortec Group. The original size of the dividend could not be determined. Jonathan Stein, a managing director with Cortec, did not return calls.