Citigroup and Lehman Brothers are in the market with a $575 million bank debt exit financing for Hayes Lemmerz International. A banker familiar with the facility would not specify commitment levels, but said the credit was collecting tickets. The deal includes a six-year, $450 million "B" term loan priced at LIBOR plus 41/4% and a five-year, $125 million revolver priced at LIBOR plus 31/2%. There is an up-front fee of 50 basis points on the institutional piece, the banker added, noting the commitment deadline is slated for May 22, but the deal's closing essentially depends on the Northville, Mich.-based automotive wheel supplier's emergence from bankruptcy. Last week, the company announced it was still in hearings with the U.S. Bankruptcy Court to confirm its modified reorganization plan.
Standard & Poor's expects that lenders to the BB- rated credit "will realize only marginal recovery of principal in the event of default or bankruptcy." The deal is secured by all assets and guarantor subsidiaries, capital stock, and a pledge of intercompany notes, which gives the lenders some protection, S&P adds. Hayes, a member of the highly competitive automotive sector, filed for bankruptcy in December 2001. The company is also doing a $225 million senior notes deal along with the credit. Citi and Lehman officials declined to comment. A Hayes spokeswoman did not return calls by press time.