FleetBoston Financial and Deutsche Bank cut 50 basis points off the pricing on a $150 million "B" loan for Waste Connections ahead of the bank meeting that was scheduled for last Thursday, according to a banker familiar with the deal. After the loan was oversubscribed with circled commitments, pricing was reset at LIBOR plus 2%, down from LIBOR plus 21Ž2%.
The banker said he could not provide the exact level of oversubscription because the arrangers were still dealing with investor reaction after the price flex. But he said oversubscription is still expected. The seven-year term loan is a part of a $500 million refinancing credit for the Folsom, Calif.-based integrated solid waste services company. The BB+/Ba2-rated credit includes a five-year, $350 million revolver that is also priced at LIBOR plus 2% (see Credit In Focus, page 7).
The banker said there were no other lenders at the managing agent level ahead of the meeting. He did not provide fees for revolver commitments, but he noted that the term loan is being issued at par. Proceeds will go toward repaying $241 million outstanding under Waste Connections' existing credit, as well as $4 million in transaction fees and expenses. The revolver will be drawn by about $100 million, according to Moody's Investors Service. The facility has a permitted incremental capacity of $100 million, which could bring the total deal size up to $600 million.
Fleet and Deutsche Bank lead Waste Connections' existing $385 million revolver, which was put in place in May of 2000. This deal is priced in the LIBOR plus 21Ž4% context. Other lenders to this deal include Comerica Bank, Chase Bank of Texas, LaSalle Bank, Union Bank of California, Wells Fargo Bank and CIBC World Markets. A Fleet official declined to comment, while a Deutsche Bank banker did not return calls. Steven Bouck, Waste Connections' cfo, could not be reached for comment regarding the pricing change.