Rexnord downsizes bonds to $785 million from $840 million, upsizes credit facility by $55 million

By Paul A. Harris

St. Louis, July 12 - Rexnord Corp. has downsized its two-part bond offering to $785 million from $840 million, according to an informed source.

Meanwhile the Milwaukee-based motion technology products manufacturer has increased its credit facility by $55 million.

The restructured bond offering leaves unchanged the $420 million tranche of eight-year senior notes (B3/CCC+). Those notes, which come with four years of call protection, are talked at the 9¼% area.

However Rexnord has downsized to $365 million from $420 million its offering of 10-year senior subordinated notes (Caa1/CCC+), and talked the subordinated notes at the 10¾% area. The 10-year senior subordinated notes come with five years of call protection.

Books close Friday afternoon with pricing expected to follow shortly thereafter.

Credit Suisse, Merrill Lynch, Bear Stearns and Lehman Brothers are joint bookrunners for the notes, which are being sold via Rule 144A with registration rights.

Meanwhile the company has upsized its funded bank debt by $55 million to $760 million, with $25 million of those proceeds funded under its revolving credit facility, the capacity of which was upsized to $150 million from $125 million, and $30 million under the term loan B, which was upsized to $610 million from $580 million.

Proceeds, together with an equity investment by an affiliate of Apollo Management LP, will be used to finance Apollo's purchase of RBS Global from The Carlyle Group as previously announced on May 25.

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