Scotia Capital, Salomon Smith Barney and Bank of America are still plugging away on Levi Strauss & Co.'s $800 million refinancing deal, topping the $300 million mark in commitments for the $400 million "B" piece. Bankers familiar with the deal said that the holiday period slowed up syndication, blowing the commitment deadline originally set for Dec. 23. However, pricing has not changed. Bankers noted that the spread is still set at LIBOR plus 4% for the term loan and LIBOR plus 31/ 2% on the $400 million revolver. Levi Strauss currently has a B1-rated, $1.05 billion facility with the three banks that matures in August of this year. Credit Suisse First Boston, FleetBoston Financial and J.P. Morgan have committed to the revolver. Scotia and B of A officials declined to comment, while a Salomon official did not return calls.
"We're not [expecting] further debt reduction [for Levi Strauss] until 2005," said Catherine Guinee, v.p. and senior credit officer at Moody's Investors Service. She added that Moody's does not expect Levi Strauss' cash flow-to-debt figures to exceed 10% in the foreseeable future. "People want to see what kind of numbers come out," an investor said, explaining that some buysiders are waiting for figures from the fourth quarter conference call scheduled today. He added that Levi Strauss' product introduction into the mass merchant market via Wal-Mart, later this year, also poses an added risk to the company's revenues. The investor, however, did not doubt that the deal would get done. Officials from Levi Strauss did not return calls for comment.