PGT Industries price talk emerges; Approximate timing on AMF surfaces

By Sara Rosenberg

New York, Jan. 12 - Price talk emerged on PGT Industries proposed credit facility with spreads expected at 325 basis points to 650 basis points depending on the tranche. Furthermore, timing on AMF Bowling Worldwide Inc.'s new deal has been narrowed somewhat with the launch expected to take place either late January or early February as opposed to the previous timetable that made it first-quarter business.

PGT Industries' $120 million six-year first lien term loan is talked at Libor plus 325 basis points, and the $50 million 61/2-year second lien term loan talked at Libor plus 650 basis points, a market source said.

Price talk on the $25 million five-year revolver was not immediately available.

Leverage through the first lien is expected to be 2.9 times, and leverage through the second lien is expected to be 4.1 times, according to the source.

Expected ratings on the deal are B1 from Moody's Investors Service and B+ from Standard & Poor's, the source added.

The facility, which is set to launch via a bank meeting on Wednesday, will be used to help support the buyout of PGT by JLL Partners Inc.

As part of the leveraged buyout the company will also receive a $157 million equity investment of which $32 million will come from the management team, according to the source.

UBS is the sole bookrunner on the credit facility.

PGT is a Nokomis, Fla., manufacturer of custom windows, doors and patio rooms.

AMF Bowling's credit facility is being obtained to help support the company's leveraged buyout by an affiliate of Code Hennessy & Simmons LLC.

All other details on the debt financing are still to be determined.

Credit Suisse First Boston and Merrill Lynch will act as joint lead arrangers on the deal.

Under the terms of the merger agreement, AMF shareholders will receive $25 in cash for each common share. The cash amount paid to AMF shareholders may be increased by $0.01 per share per day under certain circumstances if the merger has not closed by a date to be determined. In addition, following the consummation of the merger, the holders of any unexercised AMF Series A warrants will be entitled to receive the difference between the merger consideration and the exercise price.

The leveraged buyout requires approval of the shareholders of AMF at a special meeting, expiration of the Hart-Scott-Rodino Act waiting period and other customary conditions. In addition, the closing of the transaction is subject to CHS' ability to obtain financing to consummate the transaction.

The transaction is expected to close in the first quarter of calendar 2004.

AMF is a Richmond, Va., owner and operator of bowling centers and manufacturer and marketer of bowling and billiards products.

Masonite holds conference call

Masonite International Corp. held a conference call on Monday for existing lenders regarding an amendment to the company's credit facility that involves obtaining a $50 million term loan A and a $150 million term loan B, a source close to the deal said.

Previously it was anticipated that the call would either take place on Monday or Tuesday, depending on when it was most convenient for lenders and the company.

SunTrust is the sole lead bank on the loan.

Price talk on the term loan A is Libor plus 200 basis points, and price talk on the term loan B is Libor plus 225 basis points. Pricing on the A loan is expected be grid based tied to leverage while the B loan is expected not to contain grid pricing.

Proceeds from the amended facility will be used to help fund the $160 million cash acquisition price of The Stanley Works' residential entry door business.

The company currently has a revolver and term loan C with an interest rate of Libor plus 275 basis points, both of which are expected to remain in place. These tranches will be amended to allow for the $160 million cash acquisition of The Stanley Works' residential entry door business and the additional bank debt, which will be used to fund the acquisition. Pricing on the term loan C is expected to remain as is throughout this process.

On a pro forma basis and immediately after the expected closing date, the company's pro forma debt-to-equity ratio is estimated to be about 0.9-to-1 and its pro forma debt-to-EBITDA ratio is estimated to be about 2.5-to-1 based on 12 months trailing results and not including any cost benefits from the combination.

Closing of the acquisition is subject to certain governmental approvals, third-party consents and customary conditions, and is expected to occur in the first quarter of 2004.

Masonite is a Mississauga, Ont., building products company.

Nextel term A higher

Nextel Communications Inc.'s term loan A traded slightly higher on Monday in an otherwise seemingly quiet secondary bank loan market.

The Reston, Va., wireless company's bank debt was seen trading at 99 5/8, basically at the offer side, according to a trader, who placed the term loan A at 99 3/8 bid, 99 5/8 offered prior to open.

The move is being seen as a result of market technicals as "people are still looking for a place to put their money," the trader said.

"It's relatively quiet. [It] seems like a lot of guys are focused on the primary," a second trader added.

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