Co-lead arrangers Citibank and Heller Financial are seeking commitments on a $115 million credit backing Carlyle Management Group's leveraged buyout of Key Plastics. The facility comprises an $80 million revolver piece priced at LIBOR plus 3 1/4% and a $35 million term loan "A" at LIBOR plus 3 3/4%. Heller is acting as the syndication agent and Citi is the administration agent. "The company is well structured, but coming out of bankruptcy, so the revolver is there for working capital," said a banker close to the deal. The covenants are still being worked on, but will be pretty strict, she added, hoping that commitments would be signed soon. Syndication was launched at a bank meeting March 28.
The banker commented that Dallas-based Carlyle can purchase the company at a discounted price and bring financial discipline and support to the company. Key Plastics, a supplier of automobile components to the car industry based in Novi, Mich., is expecting to emerge from Chapter 11 bankruptcy by April 30, pursuant to approval from the U.S. Bankruptcy Court in Detroit. A court order allows the company to continue operations under the new ownership of Carlyle, though the court is also able to set back the closing date, noted the banker. Calls to Key were referred to officials at Carlyle, who declined to comment.