Associated Materials' "B" loan has been almost two-and-a-half times oversubscribed after receiving Ba3/BB- ratings from the agencies. A banker described the rating news as above expectations. The credit is led by UBS Warburg,Credit Suisse First Boston and CIBC World Markets. Harvest/ AMI Holdings, a newly formed company from New York-based leveraged buyout shop Harvest Partners, is the sponsor for the deal. The credit is 40% underwritten by UBS, 40% by CSFB and 20% by CIBC. The $165 million credit is split between a $40 million, five-year revolver and a $125 million seven-year "B" term loan.
No decision has been made on a flex yet, said a banker, eyeing the LIBOR plus 33/ 4% spread on the "B" loan. A $165 million senior subordinated note offering, underwritten by the three banks in the same proportions as the bank debt, is on roadshow now and was expected to be priced today, he added. On a relative-value basis, these should price at about 10%, he said. The total purchase price of the acquisition is $436 million, which includes $75 million of outstanding subordinated notes that will be refinanced (LMW, 3/25). Associated Materials is a distributor and manufacturer of vinyl siding. The purchase price works out at 7.1 times EBITDA. Robert Winspear, cfo of Associated Materials, said the banks were selected by the financial sponsor. He declined comment on the financing until the completion of the bank debt and notes.