Market sources said Dresser Equipment's $820 million credit--the largest LBO deal of the year so far--has more than $1.5 billion in commitments since its launch last week and UBS Warburg and GECC have come in on the deal as agents. Bankers said the strength of the deal has prompted the pro rata to do as well as the term loan "B" in what has been a tough pro rata market. Bankers said leads would no longer accept commitments on the term loan "B" piece of the credit this week.
GECC reportedly took $50 million of the pro rata and $32 million of the term loan "B" and UBS took $50 million of pro rata and $10 million of the term loan "B." Bankers said three more banks are reportedly also signing on as agents at $35 million apiece. Credit Suisse First Boston and Morgan Stanley Dean Witter are leading the deal. Market sources said the company's expected early excess cash flow related to low capital expenditures and high cash earnings have made the deal attractive.
The credit comprises a $100 million, six-year revolver priced at LIBOR plus 3%, a $265 million, six-year term loan "A" priced at LIBOR plus 3%, and a $455 million, eight-year term loan "B" priced at LIBOR plus 31/2 %. Commitment fees are 50 basis points.