Busysiders looking at the "B" tranche of UBS Warburg's $190 million bank deal backing Investcorp's acquisition of Neptune Technology Group from Schlumberger last week said they are expecting a price flex on the deal. Investors compared the deal to the recently twice oversubscribed J.P. Morgan deal for Compass Minerals, which offered investors a $225 million term loan "B" at a spread of LIBOR plus 3 1/2% as part of a structure including a $250 million bond deal. "This is an all-senior deal offering the same spread as Compass," lamented one buysider who passed on the deal. She explained the credit was a roughly 4X all-senior deal, leaving investors uncomfortable without any subordinated cushion. "The leverage is just way too high and the deal too small," she added.
UBS Warburg reportedly wanted to complete the deal which was launched earlier in the month before the Thanksgiving holiday (LMW, 11/19), but investors think it will take some time and re-pricing to wrap it up. Officials at UBS Warburg did not return calls by press time. The credit is comprised of a seven-year, $125 million "B" term loan, a $30 million revolver, and a $35 million "A" term loan, which both have five-year maturities. Commitments to the deal's $65 million pro rata deck will receive 1% and commitments of $20 million and $10 million will receive 3/4%.