Silgan add-on sells out as many existing lenders and a few new ones commit to the deal

By Sara Rosenberg

New York, Jan. 30 - Silgan Holdings Inc.'s $100 million add-on term loan, which was launched on Thursday, was oversubscribed by the end of the day as a lot of existing lenders and some "new guys" opted to participate in the deal, according to a syndicate source. Deutsche Bank is the lead bank on the deal.

"It went very well," the syndicate source added.

The term loan has an interest rate of Libor plus 200 basis points, which is the same rate that the company's existing senior secured credit facility carries.

This past summer, the company closed on an $850 million senior secured credit facility, which was used to refinance the existing loan ahead of its December 2003 maturity. Deutsche Bank Securities Inc. and Banc of America Securities LLC were joint lead arrangers and Deutsche Bank Trust Co. Americas, Bank of America, Citicorp USA Inc., Morgan Stanley Senior Funding Inc. and Fleet National Bank were the agents.

The loan consisted of a $100 million term loan A due June 28. 2008, a $350 million term loan B due Nov. 30, 2008 and a $400 million revolver due June 28, 2008. The agreement also provided the company with an incremental uncommitted term loan of up to $275 million, which could be used for acquisitions. All tranches were priced with an interest rate of Libor plus 200 basis points.

Proceeds from the newest term loan B are being used to help fund the acquisition of the remaining 65% percent interest in the White Cap joint venture from Amcor White Cap Inc.

Silgan Holdings is a Stamford, Conn. manufacturer of consumer goods packaging products.

Meanwhile, Crown Cork & Seal Co. Inc.'s new deal has already received over $300 million in commitments on the $500 million term loan B, according to a syndicate source.

In somewhat of a surprise move, Crown Cork & Seal launched a $1.05 billion credit facility on Wednesday, consisting of a $550 million first lien revolver with an interest rate of Libor plus 400 basis points and a $500 million first lien term loan B with an interest rate of Libor plus 425 basis points.

The launch was said to go well with over a half a dozen commitments by the end of the first day and the B loan "looking very strong", the syndicate source previously told Prospect News.

Deutsche Bank and Salomon Smith Barney are the lead banks on the deal, which is part of the company's substantial refinancing plan which includes $3 billion of new financing.

Other aspects of the comprehensive refinancing plan include $1.75 billion in senior secured second and third lien notes, $200 million of convertibles and $125 million of debt-for-equity exchanges. With the refinancing, which is expected to be completed by the end of the first quarter, substantially all of the company's debt would have maturities in 2006 and beyond.

Proceeds from the new debt will be used to refinance the company's existing revolver that was scheduled to mature on Dec. 8, and approximately $900 million of senior notes, including all of the notes scheduled to mature in 2003 and approximately $300 million of the notes due in 2004 and 2005.

On the secondary side, Crown Cork & Seal's bank debt quieted down with trading levels remaining around the 98 area, according to a trader.

"It wasn't as active as it has been," the trader said. When asked whether the paper will go up any further before the debt is refinanced, the trader responded: "I think it's traded as high as it will go."

The company's bank debt experienced a lot of trading activity on Tuesday as speculation about the company's refinancing plans was heard in the marketplace. Towards the end of the day the bank debt was reported with a bid around 973/4.

On Wednesday, the bank debt was said to be trading around 98, up slightly from the previous day's levels, according to a trader.

Crown Cork & Seal is a Philadelphia supplier of packaging products to consumer marketing companies.

Kmart Corp.'s bank debt once again moved higher as the weeklong rally continued, albeit at a slightly slower pace than earlier in the week. The loan is currently being quoted with a bid around 37½ and an offer around 381/2, about half a point higher than Wednesday's levels, according to a trader. On Monday and Tuesday, the loan was said to have moved up anywhere from a point to two points on the day.

The rally began on Monday in response to the announcement late Friday that the company filed its plan of reorganization, which anticipates an emergence from Chapter 11 in April.

As previously reported, Kmart has received a commitment for $2 billion in exit financing from GE Commercial Finance, Fleet Retail Finance Inc. and Bank of America. The exit financing facility would replace the company's current $2 billion DIP facility on the effective date of the reorganization plan.

Security for the loan will be the Troy, Mich. discount retailer's inventory.

Proceeds will be used to help fund the company's working capital needs, including borrowings for seasonal increases in inventory.

In follow-up news, pricing on Fisher Scientific International Inc.'s $400 million term loan B was flexed down by 50 basis points to Libor plus 250 basis points. Market professionals already expected this change in price last week.

The company's proposed credit facility, which is being led by JPMorgan, Deutsche and Credit Suisse First Boston, also contains a $150 million five-year revolver with an interest rate of Libor plus 300 basis points.

Proceeds will be used to help fund refinancing of $600 million 9% senior subordinated notes due 2008.

Fisher Scientific is a Hampton, N.H. manufacturer of scientific instruments, equipment and supplies.

© 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.