Credit Suisse First Boston and J.P. Morgan Chase have been selected as joint lead arrangers for a loan backing Troy, Michigan-based Collins & Aikman Products Company's acquisition of Textron Automotive Company's trim division and refinancing of existing debt. A spokesman for Collins & Aikman said that approximately $1 billion of debt will be used to finance the $1.34 billion transaction, but he declined to comment on how the company will structure it between bonds and bank debt. CSFB, J.P. Morgan, Deutsche Bank and Merrill Lynch will be the banks involved, he said. The banks chosen for the financing advised on the transaction, the spokesman said. Calls to officials at the banks were not returned.
According to a banker, Collins plans to refinance its existing $625 million bank credit agreements, which consist of a $250 million senior secured facility, a $100 million term loan "A," a $125 million term loan "B," a $100 million term loan "C" and a $50 million term loan "D." Moody's Investors Service has placed the Ba3 rating of Collins bank facilities on review for possible downgrade reflecting a belief that the price for Textron represents a full-priced multiple of Textron's historical EBITDA, given the depressed condition of the automotive market.