Deutsche Bank and ABN Amro are shopping a $125 million "B" term loan for GenCorp, backing subsidiary Aerojet-General's $90 million acquisition of General Dynamics' ordnance and tactical systems, space propulsion and fire suppression business. The five and a half-year loan, which is priced at LIBOR plus 3%, also will be used to pay $5 million in transaction costs and pay down $30 million in borrowings under the existing $137 million revolver. Deutsche Bank officials declined to comment, and ABN officials did not return calls by press time.
In addition to the revolver, the existing bank debt comprises a $76 million "A" term loan, which is led by a group of banks that include ABN and Deutsche Bank. The two have prior relations with the company, said a spokeswoman who declined to comment on why they were specifically selected to lead the financing. The Sacramento, Calif., company is attempting to double the size of Aerojet in the next three years through further acquisitions, in addition to organic growth, she noted. The credit has been given a BB rating by Fitch Ratings, while the other two agencies have rated the deal Ba2/BB+ (see story, page 7).