The $250 million "B" loan for Oriental Trading oversubscribed ahead of the bank meeting last Wednesday, with more than $260 million in hold-level commitments coming into the official launch and up to $350 million in tickets by press time, a banker said. Sole bookrunner BNP Paribas is shopping the $290 million recapitalization credit for the direct marketer of novelties, toys, party supplies and other related products. The deal will go toward refinancing holding company OTC Holdings' preferred stock, noted Anthony Choe, a director at Oriental Trading and a principal at the company's leading private equity sponsor, Brentwood Associates.
The recapitalization comes after the company put together a $180 million refinancing credit in place in July 2002 (LMW, 7/02). "The company has continued to deliver outstanding financial results and has de-levered significantly, even since the refinancing a year ago," Choe explained. "As a result, there is additional debt capacity to refinance the preferred stock." Leverage is expected to be at 3.1 times debt-to-EBITDA after the transaction, he added. The seven-year institutional piece is priced at LIBOR plus 31/2%, the banker noted, while the deal's $40 million, five-year revolver is priced at LIBOR plus 3%.
Administrative agent bank BNP Paribas is the company's existing lead, while Credit Suisse First Boston and FleetBoston Financial signed on at the agent level earlier this month, Choe confirmed. CSFB is a co-lead arranger and syndication agent, while Fleet is the documentation agent, he added. Choe said the deal comprises many existing lenders. "Some new parties have come to the table as well," he added. The existing BNP Paribas-led credit is priced in the LIBOR plus 2-23/4% range. Oriental Trading's credit from 2000 was refinanced at this time to take out high-interest mezzanine debt and to clean up the company's capital structure. Moody's Investors Service rated Oriental Trading's credit at Ba3 last week, a notch down from the existing credit's rating. BNP Paribas and CSFB officials declined to comment, while a Fleet banker did not return calls.