J.P. Morgan's $325 million credit for Revlon Consumer Products has been described as challenging by bankers, who cite the company's poor performance and decline in revenue amid a market making a flight to quality. A banker said the company is facing problems and many banks are reluctant to invest in single-B credits right now. The deal, however, is likely to be completed with existing lenders recommitting, albeit reluctantly, he added.
The deal consists of a $200 million revolver and a $125 million term loan. There is a 3% rate-floor on the term loan and the spread is 43Ž 4% over this artificial LIBOR rate. Lori Harris, analyst for Standard & Poor's said the B rating reflects a weak financial profile, characterized by high leverage and a prolonged period of poor operating results. A Revlon spokeswoman declined to comment. Calls to the J.P. Morgan press office were not returned.