Pricing on the four-year, $400 million "B" loan for International Steel Group (ISG) is likely to be in the LIBOR plus 31/2% to 33/4% range after the credit received split ratings of Ba2/BB+ from Moody's Investors Service and Standard & Poor's (see story, page 7). Pricing on the two-year bullet $300 million "A" loan is expected to be in the LIBOR plus 3% to 31/2% range, while the $300 million three-year revolver will price at LIBOR plus 23/4%, said a banker. Retail syndication will kick off on Wednesday, he added. Goldman Sachs, UBS Warburg and CIT Group lead the $1 billion asset-based bank facility, which backs the $1.5 billion acquisition of Bethlehem Steel. CIT is collateral agent and will monitor the borrowing base and run all the metrics, explained the banker.
Cleveland-based ISG was organized in April 2002 by WL Ross & Co. as Wilbur Ross has sought to acquire steel assets and leave legacy costs behind. "He's now got a massive cost advantage over other steel companies," said the banker. Ross' relationship banks that have signed on at the managing agent level include Citibank, Fleet Capital, Morgan Stanley, Huntingdon Bank and ABN Amro-subsidiary LaSalle Bank. Commitments to this level are at $40 million or less and a handful more were considering signing on as LMW went to press, according to bankers. The two-year bullet "A" loan is a bridge to a capital markets deal, probably an initial public offering, one banker added. Calls to Ross were not returned by press time.