Credit Suisse First Boston and Merrill Lynch were scheduled to launch syndication last Friday for a $100 million refinancing deal for Jafra Cosmetics International. The five-year credit includes a $40 million revolver and a $60 million "A" loan. Pricing for the deal could not be confirmed by press time, but the current facility is priced at LIBOR plus 25/8% and includes a $65 million revolver and a $25 million "A" piece. J.P. Morgan is the syndication agent on the existing deal, but Merrill is taking the role in the new credit. The company's Mexican division is also issuing $175 million in notes due 2011 alongside the B1-rated credit. CSFB and Merrill bankers did not return calls.
Proceeds from the term loan and notes will be used with $22 million of cash balances to fund a $154 million distribution to affiliates of Jafra's equity sponsor Clayton, Dubilier & Rice (CDR), along with repaying the existing debt. The transactions will increase Jafra's leverage from around 1.2 times to about 3.3 times, according to Moody's Investors Service. Jafra management and CDR bought out the company for $200 million in 1998 from The Gillette Company. Westlake Village, Calif.-based Jafra is a worldwide direct sales company for skin care and beauty products. A CDR spokesman declined to comment.