Manitowoc shifts funds, adds step-down; AlliedBarton frees to trade; GM dips; LCDX rises

By Sara Rosenberg

New York, Aug. 20 - Manitowoc Co. Inc. came out with some changes to its credit facility, including moving some funds between the term loan A and term loan B tranches, and adding a pricing step-down to the term loan B.

Meanwhile, over in the secondary, AlliedBarton Security Services' credit facility allocated and broke for trading, with the term loan quoted above its original issue discount price, General Motors Corp.'s term loan slid lower and LCDX 10 ended the day higher.

Manitowoc announced some modifications to its credit facility "due to the great reception in the market," which involved revising certain tranche sizes and adding a step-down in spread to the term loan B, according to a market source.

Under the changes, the five-year term loan A was upsized to $1.025 billion from $900 million, with pricing on the tranche remaining unchanged at Libor plus 325 basis points, the source said.

On the flip side, the six-year term loan B was downsized to $1.2 billion from $1.325 billion, and although pricing was left unchanged at Libor plus 350 bps, a step-down to Libor plus 325 bps was added that becomes effective when leverage is below 2.0 times, the source continued.

As before, the term loan B has a 3% Libor floor and is being offered to investors at an original issue discount of 98.

Manitowoc's $2.925 billion credit facility (Ba2/BB+) also includes a $400 million five-year revolver and a $300 million 18-month term loan X, with both of these tranches priced in line with initial talk at Libor plus 325 bps.

Upfront fees on the revolver, term loan A and term loan X are based on commitment level.

JPMorgan, Deutsche Bank, Morgan Stanley and BNP Paribas are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan the administrative agent, Deutsche and Morgan Stanley the syndication agents, and BNP the documentation agent.

Proceeds will be used to help fund the acquisition of Enodis plc for 328 pence per Enodis share, resulting in a transaction valued at about $2.7 billion, including the assumption of Enodis' net debt, which was about $249 million/£125 million as of March 29.

In April, Manitowoc agreed to buy Enodis for 258 pence per share, but then in early May, Illinois Tool Works Inc. offered to buy the company for 280 pence in cash per share, plus a 2 pence per share dividend. Following the first Illinois Tool Works offer, Manitowoc increased its bid to 294 pence per share, plus a 2 pence per share dividend, and then the offer was increased again during an auction process.

As a result of Manitowoc increasing its purchase price for Enodis, the term loan B was upsized twice before the deal even came to market, first moving to $1.075 billion from $800 million, and then to $1.325 billion from $1.075 billion.

Furthermore, pricing on the deal is different than what the company had originally outlined in filings with the Securities and Exchange Commission. According to those filings, all the tranches were expected to carry initial pricing of Libor plus 300 bps.

The transaction is expected to close in the fourth quarter and it will be structured as a court-sanctioned scheme of arrangement under the laws of the United Kingdom.

Earlier this month, the company announced that it plans to pay down debt that it is incurring for the Enodis transaction using proceeds from the sale of its Marine segment.

The Marine segment, which is a full-service shipbuilding, ship repair and ship conversion organization, is being sold to Fincantieri Marine Group Holdings Inc. and Lockheed Martin Corp. in a transaction valued at $120 million.

Remaining proceeds from the sale, which is expected to close at the end of the year, will be used for general corporate purposes.

Manitowoc is a Manitowoc, Wis.-based provider of lifting equipment for the construction industry, manufacturer of cold-side equipment for the foodservice industry, and provider of shipbuilding, ship repair and conversion services. Enodis is a Tampa, Fla.-based food and beverage equipment manufacturer.

AlliedBarton breaks

Switching to trading news, AlliedBarton Security Services' credit facility hit the secondary market on Wednesday, with the $330 million term loan quoted north of the original issue discount price at which it was sold during syndication, according to a trader.

The term loan opened for trading at 96½ bid, 97 offered and then moved up to 98 bid, 98¾ offered, the trader said.

The term loan is priced at Libor plus 450 bps with a 3.25% Libor floor and was sold to investors at an original issue discount of 96.

AlliedBarton's $385 million senior secured credit facility (Ba3/BB-) also includes a $55 million revolver priced at Libor plus 450 bps.

During syndication, the term loan was upsized from $325 million and the original issue discount widened from 98. The change in the size of the term loan was done to account for the larger discount price.

Other changes made to the deal during syndication included bumping up amortization on the term loan primarily in years two and three, tightening the leverage and the interest coverage ratio covenants and modifying the equity cure in the credit agreement.

Credit Suisse, HSBC and GE Capital are the lead banks on the deal.

Proceeds will be used to help fund the buyout of the company by the Blackstone Group.

The transaction is expected to close in August subject to certain government approvals and other customary conditions.

AlliedBarton is a King of Prussia, Pa.-based provider of highly trained security personnel.

GM inches lower

General Motors' term loan lost some ground in trading with market technicals being blamed for the movement, according to a trader.

The term loan was quoted at 73 5/8 bid, 74¾ offered, down from Tuesday's levels of 73¾ bid, 74 7/8 offered, the trader said.

General Motors is a Detroit-based automotive company.

LCDX better

LCDX 10 ended the day slightly higher on Wednesday as it moved up when equities rallied at the close, according to a trader.

The index went out around 96.60 bid, 96.70 offered, up from Tuesday's levels of 96.45 bid, 96.65 offered, the trader said.

Nasdaq closed up 4.72 points, or 0.20%, Dow Jones Industrial Average closed up 68.88 points, or 0.61%, S&P 500 closed up 7.85 points, or 0.62%, and NYSE closed up 64.44 points, or 0.79%.

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