The $475 million "B" loan backing the acquisition of school yearbook and class ring-maker Jostens had already gained about $1.2 billion in commitments as of late last week, according to bankers. The tranche is a part of a $650 million facility being used to partially finance the $1.2 billion acquisition. Credit Suisse First Boston and Deutsche Bank are the lead arrangers shopping the credit. Ring Acquisition Corp.--a newly formed company controlled and managed byCSFB Private Equity and its private equity fund DLJ Merchant Banking III LP--is acquiring Jostens from Investcorp, MidOcean Partners, First Union Leveraged Capital and Northwestern Mutual Life Insurance (LMW, 6/23).
The seven-year institutional piece is priced at LIBOR plus 3%. The credit also includes a seven-year, $50 million delayed-draw term loan priced at LIBOR plus 3% and a five-year, $125 million revolver priced at LIBOR plus 23/4% with a commitment fee of 50 basis points. The revolver and "B" loan will also aid in refinancing Jostens' existing debt. DLJ is assuming $537 million of the Minneapolis-based company's debt and other securities. Jostens' shareholders approved the acquisition last Tuesday, the same day as the bank meeting.
Moody's Investors Service announced a Ba3 rating for the credit last week. Jostens' existing deal is rated B1. "Despite a lack of liquid and tangible asset coverage, the ratings on the credit facilities are supported by the company's durable enterprise value, subsidiary and parent guarantees, and substantial amount of subordinated debt (around $217.5 million) and junior capital," Moody's states. A CSFB official declined to comment and Deutsche Bank bankers did not return calls. John Feenan, cfo of Jostens, and Jack Larsen, treasurer, were out of the office late last week and could not be reached for comment.