Securitization People and Markets

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

Pro rata investors were looking at VITAS Healthcare Corp.'s $35 million second-lien term loan in addition to the first-lien $25 million revolver and $60 million term loan, a banker close to the deal said. He did not cite specific pro-rata lenders, but added that standard second-lien investors were also eyeing the LIBOR plus 10% priced tranche.

UBS and CIBC World Markets are leading a $231 million bank facility backing The Cypress Group's $433 million acquisition of J.W. Childs-owned The Meow Mix Company. The new bank loan will comprise a $30 million revolver, a $176 million term loan and a $25 million second-lien term loan, said a banker, who added that syndication will launch July 30. A bank credit was repotedly chosen rather than a high-yield deal because the company has only one year of audited financials.

UBS launched syndication last week of a $175 million asset-based revolver for Broder Bros. backing the sportswear distributor's acquisition of Alpha Shirt Company for $360 million. A banker familiar with the deal said CIT Commercial Services came into the deal ahead of the bank meeting as a collateral agent, while Bank One joined as a syndication agent. Pricing on the revolver is LIBOR plus 21/2% with a 50 basis point undrawn fee, he added. About $80 million of the revolver is expected to be drawn upon closing, he also noted. There is a senior notes deal emerging in relation to the transaction. The bond deal should come out either this week or the next, the banker said.

ABN Amro and UBS' $275 million refinancing deal for EaglePicher was headed toward full subscription late last week. The $125 million revolver was fully subscribed ahead of the bank meeting on July 17, while tickets for the $150 million "B" loan rolled in throughout the week, bankers said. The "B" piece is priced at LIBOR plus 4% and the revolver has a spread of 31/2% over LIBOR. UBS is also leading a concurrent $220 million bond deal, the bankers noted, adding that the road show kicked off last Wednesday. The bond deal will go toward a cash tender offer for the Phoenix-based company's 93/8% senior subordinated notes due 2008.

Refinancing and repricing deals have caught on like wildfire as companies are seizing issuer-friendly opportunities to capture better pricing on their credits while they still have the chance. Last week, DirecTV and National Waterworks tapped investors for tighter pricing on credits that were completed less than nine months ago. DirecTV's $1.675 billion deal was originally completed last March, while National Waterworks was done last November. DirecTV is seeking to tighten its "B" loan, while National Waterworks seeks to ease some of the concessions that lead banks J.P. Morgan, Goldman Sachs and UBS had to ante up in order to get the deal done late last year (LMW, 11/18).

J.P. Morgan and Bank of America were set to pitch a $1.125 billion "B" loan for Insight Communications' Insight Midwest arm last Thursday, according to senior v.p. and cfo of the company, Dinni Jain. Insight Midwest currently has a $900 million "B" loan, however the tranche will be refinanced with $225 million more in capacity in order to help refinance all of the indebtedness of Insight's Ohio operating subsidiary, Jain said. The entire credit will now total $1.975 billion. The deal also has a $425 million revolver and a $425 million "A" loan. Insight, the ninth largest cable operator in the U.S., will refinance the Ohio subsidiary's $140 million of 10% senior notes due 2006, $55.9 million of 127/8% senior discount notes due 2008 and a $22.5 million credit facility.

Cinram International will use $1.2 billion in bank facilities led by Citigroup and Merrill Lynch to fund the $1.05 billion acquisition of the DVD and CD manufacturing and physical distribution businesses from AOL Time Warner, said Cinram CFO Lewis Ritchie. Merrill advised on the deal. The credit comprises a $150 million revolver and $1.05 billion in term loans with an average tenor of 5.9 years. The revolver will be undrawn when the acquisition closes in the fall, said Ritchie. Citi and Merrill bankers did not return calls.