Federal-Mogul launches $2.6 billion of term loans to investors

By Sara Rosenberg

New York, March 21 - Federal-Mogul Corp. held a call at 10:00 a.m. ET on Friday to launch $2.6 billion of covenant-light term loans, according to market sources.

The debt consists of a $500 million four-year term loan B and a $2.1 billion seven-year term loan C, sources said.

Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are the lead banks on the deal, with Citi the left lead on the term loan B and Credit Suisse the left lead on the term loan C.

Price talk on the term loan B is Libor plus 300 basis points to 325 bps with a 1% Libor floor and an original issue discount of 993/4, and talk on the term loan C is Libor plus 350 bps to 375 bps with a 1% Libor floor and a discount of 991/2, sources continued.

Both term loans have 101 soft call protection for six months.

Proceeds will be used to refinance the company's existing term loans.

Commitments are due on April 1, sources added.

Federal-Mogul is a Southfield, Mich.-based supplier of powertrain and safety technologies.

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