Securitization People and Markets

The Royal Bank of Scotland has been mandated to lead a credit backing equity sponsor American Securities Capital Partners and company management in the buyout of Oreck Corporation. A banker familiar with the deal said the full details of the credit have not been determined. But he noted the deal is estimated to comprise approximately $140 million of funded financing with a revolver. RBS is out to possible co-leads on the deal, he added, noting that a retail launch will soon follow. The vacuum cleaner company deal is expected to be leveraged just over three times debt-to-EBITDA, all senior. New Orleans-based Oreck sells cleaning equipment and machines throughout North America, South America, Europe and Asia. A RBS official declined to comment. David Horring, managing director at American Securities, did not return calls. An Oreck official could not be reached by press time.

Morgan Keegan has hired collateralized mortgage obligation trading veteran Andy O'Fee away from Merrill Lynch. O'Fee, who started last Monday, will be part of Morgan Keegan's seven-trader mortgage-backed securities trading unit, according to MBS chief Chris Perkins, who declined further comment on the matter. He will be responsible for trading secondary agency issues, says an individual with knowledge of the situation. He will be a senior v.p. based in the firm's Memphis headquarters.

UBS Warburg is preparing to launch syndication of a $450 million credit backing TransMontaigne's acquisition of the Florida petroleum operations from El Paso Corp. The new facility consists of a three-year, $250 million revolver and a three-year, $200 million term loan, which increases the company's existing credit line by $150 million. FleetBoston Financial led the previous facility. A banker familiar with the new deal said it is still too early to determine pricing, but that the deal would be syndicated in early April. A UBS official declined to comment.

UBS Warburg's $100 million "B" piece for Serologicals' acquisition of Chemicon International hit the market last Thursday with a LIBOR plus 41/4% coupon. The five-year, fully underwritten deal also includes a $25 million revolver priced at LIBOR plus 33/4%, according to a banker familiar with the facility. This is the life sciences company's first "B" loan. Bud Ingalls, Serologicals' cfo, said in a previous interview that Serologicals was advised that an institutional piece would receive the best reception in the present market (LMW, 2/24). UBS was also the financial advisor for the $95 million acquisition. A UBS official declined to comment. Ingalls was travelling last week and could not be reached.

UBS Warburg has recruited Mike Rosenberg and Jeff Herlyn from J.P. Morgan Securities to be the co-heads of its global credit collateralized debt obligation business. The positions are newly created. Both start today and report to the co-heads of global credit derivatives Mike Connor and Sal Naro. Naro confirmed the move.

WaMu Capital Corp., the mortgage-backed securities trading subsidiary of Washington Mutual, continues to flesh out its nascent MBS effort. It has hired whole-loan collateralized mortgage obligation trader and structurer David Nagle from Banc of America Securities, says group chief Tim Maimone. Nagle had left the firm and was unavailable to comment. A call to Pat Augustine, head of B of A's MBS group, was not returned. Maimone says Nagle will be in charge of developing the firm's whole loan CMO strategy, including structuring and trading.

J.P. Morgan and Citibank were said to be in talks last week to revamp KinderCare Learning Centers' $470 million refinancing credit after investors called for more than just stock to back the deal. Kohlberg Kravis Roberts & Co. owns about 80% of the company and traditionally secures its deals only with stock, investors said. But with concerns about issues such as the childcare company's low organic growth rate and negative free cash flow figures, some market players are passing on the deal if it's only secured by stock. One investor added that pricing tweaks could also be in order. The deal launched last month and includes a $350 million "B" loan and a $120 million revolver priced in the LIBOR plus 3-3 1/4% range. A J.P. Morgan spokesman said there were no changes to the credit as LMW went to press last Friday and he would not comment as to future revamp plans. Calls to Dan Jackson, cfo of KinderCare, were not returned.

J.P. Morgan and FleetBoston Financial may have to increase pricing on a $250 million credit for National Mentor as the banks struggle to attract investors. Commitment levels for the BB- rated deal that was launched on Feb. 10 could not be determined. "Investors have been a little more wary these days of non-investment grades. It's not specific to the company so much as the general look of the market," a source said. A FleetBoston official declined to comment.

GE Commercial Finance, Bank of America and Fleet Retail Finance are pitching Kmart's $2 billion exit financing deal to managing agents this Thursday. The credit resembles the bankrupt company's existing debtor-in-possession facility, said a banker familiar with the facility. The package includes a $1.8 billion revolver and a $200 million "B" loan priced at LIBOR plus 3 1/2%, he added. The deal is secured by inventory and would be subject to the company's satisfaction of customary closing conditions. The credit will be used for ongoing capital needs when the mass merchandising retail company emerges from Chapter 11, targeted for the end of next month. A B of A official declined to comment, while Fleet and GE bankers did not return calls.