Credit Suisse First Boston pitched a five-year, $75 million add-on "B" piece for real estate services company CB Richard Ellis last Thursday. A banker familiar with the deal said some commitments were obtained after the meeting, but he would not specify the level of subscription. The fully underwritten loan backs the company's $415 million all-cash acquisition of New York-based Insignia Financial Group. CSFB is shopping the B+/B1-rated deal with a LIBOR plus 41/4% coupon, which is the same rate as the original $185 million institutional piece. The loan will join the Los Angeles-based company's CSFB-led amended and restated credit, originally put in place in 2001. The entire deal now includes a $90 million revolver, a $50 million "A" loan and a $260 million "B" piece. The pro rata is priced in the LIBOR plus 31/4-33/4% range.
The firm was able to attain greater flexibility for the restated credit's leverage and interest rate covenants, noted Moody's Investors Service. But Moody's added, "The potential value of [the company's pledged] assets in a distressed scenario would not be sufficient to consider a differential in credit quality between the secured bank facility and the senior unsecured bonds." The company is also planning a $200 million senior unsecured note offering. The combined company anticipates revenues exceeding $1.8 billion in 2003. CB Richard Ellis is receiving $145 million from investment firm Blum Capital Partners on top of the add-on loan to finance the acquisition, which is expected to close next month. A CSFB official declined to comment and a CB Richard Ellis spokesman did not return calls before press time.