Jostens' B loan attracts orders prior to launch, boosting expectation of smooth syndication

By Sara Rosenberg and Paul A. Harris

New York, July 7 - Jostens Inc.'s $650 million credit facility, which is slated to launch on Tuesday, has already received some orders for the term loan B and talk is that there is already a good amount of commitments in the book, according to one market source, Exact numbers were not immediately available.

"It's a good story. Leverage is pretty reasonable, the source said, adding that it would not a surprise if the deal was a complete blowout.

According to another source, the deal should go well if past performance is any indication of what to expect in terms of market reaction.

"It's always been a pretty well received credit. Classic high yield story - leading market position, steady revenue stream. It's a popular credit," the professional said.

The facility consists of a $125 million five-year revolver with an interest rate of Libor plus 275 basis points and a $525 million seven-year term loan B with an interest rate of Libor plus 300 basis points, according to a syndicate source.

Proceeds will be used to help fund the leveraged buyout of Jostens by DLJ Merchant Banking Partners III, LP and affiliated funds, each managed by CSFB Private Equity for cash consideration of approximately $48 per common share. Jostens is currently 88% owned by Investcorp, a global investment group, its co-investors and MidOcean Partners. The transaction is expected to close by Sept. 30, 2003.

Credit Suisse First Boston and Deutsche Bank are leading the deal.

Jostens is a Minneapolis provider of school related affinity products.

Calpine Corp.'s $600 million four-year second- priority senior secured term loan is already "well oversubscribed at this point", according to a syndicate source, as "very wide interest" was received on the tranche, which is currently being marketed in conjunction with a $1.2 billion high yield notes offering. The roadshow for the bonds and the term loan began early last week via Goldman Sachs as lead bank on both offerings.

Both the bonds and the term loan will be marketed through Wednesday, with pricing expected on Thursday.

The bond deal will come in three tranches: one fixed-rate tranche of seven-year non-call four-year notes, one fixed-rate tranche of 10-year non-call-five notes and one tranche of four-year non-call-two floating rate notes.

Syndication of the term loan was anticipated to go well as the expectation was that the high-yield bond players and hedge funds it was being marketed to would favorably receive the deal.

Security for the notes and term loans will be substantially all of the assets owned directly by Calpine, including natural gas and power plant assets and the stock of Calpine Energy Services and other subsidiaries.

Proceeds from the offering will be used to repay existing indebtedness including $950 million of term loan B borrowings, $450 million outstanding under the company's working capital revolvers and outstanding public indebtedness.

In addition to the term loan, the San Jose, Calif. power company is also in the process of obtaining a $500 million first priority lien working capital revolver. Bank of Nova Scotia is the lead bank on this facility, which is mostly being marketed to existing lenders, the source said.

The revolver will be secured by a first-priority lien on the same assets that will secure the notes and term loans. This new revolver will replace the existing $950 million working capital revolver.

Syndication on Nellson Nutraceutical Inc.'s $285 million senior secured credit facility was wrapped up last Thursday as the loan was closed and funded, according to a source close to the deal.

UBS Investment Bank led the deal, with Goldman Sachs and BNP Paribas acting as co-syndication agents, and GE Capital as documentation agent.

During syndication, the $260 million term loan was reverse flexed by 50 basis points to Libor plus 300 basis points due to a substantial oversubscription to the tranche.

The facility also contains a $25 million revolver with an interest rate of Libor plus 400 basis points.

The Irwindale, Calif. nutritional bar and powder manufacturer is used the new facility to support the acquisition of substantially all of the assets and certain liabilities of Bariatrix Products International Inc., a privately held Montreal-based manufacturer of functional bars and powders. In addition, rollover equity coming from Tom Egger, chief executive officer of Bariatrix, other members of the founding Egger family and members of the Bariatrix senior management team was used to finance the acquisition. The successful completion of the acquisition was announced on Monday.

"The acquisition of Bariatrix allows us to strengthen our competitive position in the industry, but more importantly the combined R&D, formulation and manufacturing expertise allows us to better serve our existing partners," said Ben Muhlenkamp, chief executive officer of Nellson Nutraceutical, in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.