Structural tweaks are expected as syndication wraps up on wholesale used-vehicle auctioneer ADESA's $500 million facility. The credit was twice oversubscribed on pure bank demand, a banker said. The deal, which supports ADESA's separation from its parent ALLETE, is led by UBS and Merrill Lynch.
Currently the facility is structured as a $150 million revolver, $200 million "A" loan and $150 million "B" loan. The five-year pro rata is being talked at LIBOR plus 2 1/4%, while the six-year "B" loan carries a spread of LIBOR plus 2 1/2%. Some retranching will probably be done, the banker said. The deal is expected to close this week.
On a pro forma basis, total debt will be about $600 million and 2003 leverage would have been 2.2 times. In addition to the new bank facility, the company is issuing $150 million of notes. Loan and bond proceeds will be used to pay a $100 million dividend to ALLETE, repay $200.2 million of outstanding debt owed to unaffiliated third parties, and repay around $136.1 million in outstanding intercompany debt owed to ALLETE and its subsidiaries. Cameron Hitchcock, ADESA's cfo, referred calls to UBS and Merrill bankers, who either did not return calls or declined comment.