Affinia $225 million notes pricing Thursday, talked at 11% to 11¼%

By Paul Deckelman

New York, Aug. 5 - Affinia Group Inc. is expected to price its $225 million issue of senior secured notes due 2016 on Thursday morning, high yield syndicate sources said Wednesday. They indicated that price talk on the issue envisioned a yield of between 11% and 11¼%, with an original issue discount of approximately 2 points.

The Ann Arbor, Mich.-based automotive parts manufacturers' offering is being brought to market by left bookrunner JP Morgan Chase & Co. and joint bookrunners Bank of America Merrill Lynch, Barclays Capital and Deutsche Bank Securities.

The notes will be non-callable for the first three years after issue - a change from the four years of call protection included in the preliminary deal terms which made the rounds of the market after the company's announcement on Monday of its upcoming bond issue.

The paper is being sold under Rule 144A and will carry that designation for the life of the issue. The debt will be secured by a first lien on everything except for Affinia's current assets, which will be security on a second-lien basis. Those current assets will meantime secure on a first-lien basis a $315 million asset-backed revolver which the company is expected to launch on Monday. That revolver will also be secured by a second lien against all of the company's other assets.

Affinia said that it plans to use the deal proceeds, together with funds from unspecified other sources - i.e. the expected new revolver - to repay its existing term loan, its existing revolving credit facility and its accounts receivable securitization facility.

Moody's Investors Service assigned the upcoming bond issue a B1 rating.

Affinia is a designer, manufacturer and distributor of automotive aftermarket components - notably brakes, filtration and chassis products - for passenger cars, SUVs, light and heavy trucks and off-highway vehicles. It was formed when Toledo, Ohio-based automotive components manufacturer Dana Corp. sold its automotive aftermarket business to Cypress Group, a private equity company, in December 2004.

Sara Rosenberg contributed to this story

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