Investors undaunted by lower pricing on Owens-Illinois' B loan

By Sara Rosenberg

New York, May 16 - Investors continued to show their support for Owens-Illinois Inc.'s credit facility as no accounts pulled out on Friday following a flex down in price of the term loan B, according to a syndicate source. The $750 million five-year term loan B is now priced with an interest rate of Libor plus 325 basis points, 25 basis points lower than the original pricing of Libor plus 350 basis points.

This tranche was subscribed by the end of its May 7 launch date and had received over $1 billion in commitments by May 9.

Some things working in favor of the deal are the existing lender group and the company's success in dealing with asbestos issues.

The facility also contains a $650 million four-year revolver with an interest rate of Libor plus 325 basis points and a $500 million four-year term loan A with an interest rate of Libor plus 325 basis points.

The upfront fee on the B loan is 25 basis points. On the pro rata, there is 100 basis points upfront fee for a commitment of $25 million and a 75 basis points upfront fee for a commitment of $15 million.

Deutsche Bank and Bank of America are the lead banks on the Toledo, Ohio manufacturer of packaging products' refinancing deal.

The facility is expected to allocate either late next week or the week after.

Affinity Group Inc.'s $175 million credit facility (Ba2/BB-) is expected to allocate and break for trading at the beginning of next week, a source close to the deal. Previously, it was hoped the deal would allocate as soon as Friday.

The oversubscribed loan consists of a $35 million five-year revolver with an interest rate of Libor plus 350 basis points and a $140 million six-year term loan B with an interest rate of Libor plus 400 basis points.

FleetBoston and CIBC are the lead banks on the Englewood, Colo. direct marketing company's deal that will be used to repay existing bank debt, repurchase a portion of the notes at Affinity Group Holding, Inc. and fund a shareholder distribution.

As for new deals, Riddell Sports Group Inc. launched an $80 million credit facility on Friday. Wachovia is the lead bank on the deal.

The loan consists of a $30 million five-year revolver with an interest rate of Libor plus 450 basis points and a $50 million five-year term loan with an interest rate of Libor plus 450 basis points.

Proceeds will be used to help fund a leveraged buyout with Fenway Partners as the sponsor.

Riddell is a designer, manufacturer and marketer of football, baseball and other sporting equipment.

And, Le Nature's Inc. held a bank meeting on Friday via a conference call regarding a $100 million five-year revolver. Wachovia is the lead bank on t he deal.

The revolver has an interest rate of Libor plus 350 basis points.

Proceeds will be used to refinance existing debt.

Le-Nature's is a Latrobe, Pa. all natural, fully pasteurized beverages company.

Coming up next week there are a few new deals including, Global Imaging Systems Inc. and Pacer International Inc.

Global Imaging is scheduled to hold a bank meeting on Wednesday for a $250 million senior secured credit facility, consisting of a $100 million five-year revolver with an interest rate of Libor plus 275 basis points and a $150 million six-year term loan with an interest rate of Libor plus 350 basis points. Wachovia is the lead bank on the deal.

Proceeds will be used to refinance the existing senior credit facility.

Global Imaging is a Tampa, Fla. provider of office technology solutions.

Also slated for Wednesday is the launch of Pacer's $330 million credit facility on Wednesday, consisting of a $75 million five-year revolver with an interest rate of Libor plus 325 basis points and a $255 million seven-year term loan B with an interest rate of Libor plus 325 basis points, according to a syndicate source. Deutsche Bank is the lead bank on the deal.

Proceeds will be used to refinance the Concord, Calif. logistics provider's existing credit facility and redeem or repurchase all its existing 11¾% senior subordinated notes.

In the secondary, Medex Inc.'s new term loan B, which began trading on Thursday, was quoted with a slightly lower bid on Friday at par 1/4, compared to a par 3/8 bid previously. The offer remained at par 3/4, according to a trader.

On Thursday, the loan traded as high as par 3/4, a point above the original issue price of 993/4.

The new loan (B1/B+) consists of a $125 million six-year term loan B with an interest rate of Libor plus 400 basis points and a $25 million five-year revolver with an interest rate of Libor plus 350 basis points. Wachovia and Lehman are the lead banks on the deal.

Originally, the term loan was sized at $175 million but was reduced following the company's decision to upsize its bond offering by $50 million to a total of $200 million

Proceeds will be used to help fund Medex and One Equity's leveraged buyout by of the Jelco peripheral IV catheter business of Johnson & Johnson.

Medex is a Dublin, Ohio seller of disposable and non-disposable critical care products.

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