Peach ups B loan spread, adds call protection; Plastech floats pricing guidance; Sally Beauty breaks

By Sara Rosenberg

New York, Nov. 10 - Peach Holdings Inc. flexed pricing higher on its term loan B on Friday and added call premiums to the tranche, and Plastech Engineered Products Inc. has been giving accounts pricing guidance on its in-market credit facility, although official price talk on the deal isn't expected to surface until Monday.

Meanwhile, in secondary happenings, Sally Beauty Co.'s credit facility freed for trading, with the term loan B quoted in the upper par's.

Peach Holdings made some changes to its $300 million term loan B tranche including increasing the spread and adding three years of call protection, according to a market source.

The term loan B is now priced at Libor plus 375 basis points, up from original talk at launch of Libor plus 300 to 325 bps, the source said.

Furthermore, the term loan B is now non-callable for one year, then at 102 in year two and 101 in year three, the source added.

Peach's $335 million senior credit facility (B2/B) also includes a $35 million revolver with a 50 bps unused fee.

Commitments from lenders on the revised transaction are due on Monday.

Bear Stearns is the lead bank on the deal that will be used to fund the acquisition of Peach by Orchard Acquisition Co., an affiliate of DLJ Merchant Banking Partners.

Peach is a Boynton Beach, Fla., specialty factoring company that purchases high-quality deferred payment obligations.

Plastech guidance

Plastech Engineered Products has been talking to accounts about what type of pricing context they could expect but is waiting until Monday or so to come out with official talk, according to a market source.

The guidance that is currently out in the market includes talk of Libor plus 200 bps on the $200 million ABL revolver, Libor plus 450 to 500 bps on the $250 million term loan B and Libor plus 750 to 800 bps on the $150 million second-lien term loan, the source said.

In addition, accounts are being told that the term loan B may carry 101 soft call protection for one year and the second lien will likely carry call protection of 102 in year one and 101 in year two, the source remarked.

"The deal is coming along well so far - there is a strong existing bank group, so a decent percentage of those [are expected] to roll their positions, and [there are] a lot of new accounts working."

Goldman Sachs is the lead bank on the $600 million deal that was launched with a bank meeting this past Tuesday.

Proceeds will be used to refinance existing debt.

Plastech is a Dearborn, Mich., maker of blow-molded and injection-molded plastic products, primarily for the automotive industry.

Sally Beauty frees to trade

Switching over to the secondary market, Sally Beauty's credit facility allocated and broke for trading, with its $920 million seven-year term loan B (B2/B+) quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan B is priced with an interest rate of Libor plus 250 bps and can step down to Libor plus 225 bps when net secured debt to EBITDA is equal to or lower than 3.0 times. During syndication, the tranche was upsized from $870 million and pricing was reduced from original talk of Libor plus 275 bps with the addition of the step.

Sally Beauty's $1.47 billion senior secured credit facility also includes a $150 million six-year term loan A (B2/B+) priced at Libor plus 250 bps and a $400 million five-year asset-based revolver (Ba2/BB-) priced at Libor plus 150 bps. During syndication, the term loan A was downsized from $200 million when the term loan B was upsized.

Merrill Lynch, JPMorgan, Bank of America and Morgan Stanley are joint lead arrangers and joint bookrunners on the deal, with Merrill the administrative agent.

Proceeds from the credit facility, along with $430 million of senior unsecured notes and $280 million of senior subordinated notes, will be used to help fund the company's spinoff from Alberto-Culver Co.

Under the spinoff plan, Alberto-Culver's shareholders will receive a special $25.00 per share one-time cash dividend for each share and, upon completion of the transaction, Alberto-Culver shareholders will own one share of Alberto-Culver stock and one share of Sally Beauty stock for each share held.

Alberto-Culver shareholders will own 52.5% of the shares of Sally Beauty, which will become a new public company listed on the New York Stock Exchange.

The remaining 47.5% stake in Sally Beauty will be owned by Clayton, Dubilier & Rice, which will invest $575 million to acquire the equity stake.

Sally Beauty is a Melrose Park, Ill., beauty supplies distribution business.

Reliance closes

Reliance Steel & Aluminum Co. closed on its new $1.1 billion five-year unsecured revolving credit facility, according to a company news release. Bank of America acted as the lead bank on the deal.

There is a $500 million accordion feature.

Proceeds were used to fund the repurchase by Earle M. Jorgensen Co. of its 9¾% senior secured notes due 2012, and for working capital and general corporate purposes, including acquisitions, capital expenditures, debt repayments, dividend payments and stock repurchases.

The new revolver replaces the company's existing $700 million credit facility and its $100 million short-term credit facility.

Reliance is a Los Angeles-based metals service center company.

© 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.