Investors oversubscribed to the $150 million "B" loan for Buckeye Technologies last week, resulting in a 50 basis point decrease in price talk on the tranche ahead of the bank meeting scheduled for tomorrow. The Citigroup and FleetBoston Financial-led, $220 million facility now has price talk set in the LIBOR plus 3% range for both the institutional piece due April 2010 and the $70 million revolver due September 2008, according to a banker.
Proceeds from the term loan and $7 million of the revolver are expected to in part be used to repay about $135 million drawn under the company's existing revolver. Proceeds will also go toward $4 million in refinancing fees and expenses, and will refinance a $30 million accounts receivable securitized revolver when it matures in December. UBS is a documentation agent on the deal.
Fleet leads the company's existing $215 million revolver, which is priced on a grid tied to leverage in the LIBOR plus 33/4% context. Buckeye amended this deal last August for the fourth time since it was put in place in April 2001 in order to loosen covenants related to debt-to-EBITDA and other performance targets (LMW, 8/11). The Memphis, Tenn.-based manufacturer and maker of specialty cellulose and absorbent products also closed on a $200 million private placement late last month, which will be used partly to redeem its 81/2% senior subordinated notes due 2005 and a portion of its bank debt. Gayle Powelson, senior v.p. and cfo, and a Fleet banker did not return calls. A Citi official declined to comment.