Amerco executes term sheets for $650 million financing

By Sara Rosenberg

New York, Dec. 20 - Amerco has executed term sheets for $650 million in financing with two financial institutions. This financing is part of the company's recapitalization, which began on Oct. 15.

Otherwise, there was little activity in the bank loan market, with no other primary news beyond various deals closing and scarcely more activity in the secondary as many started the holidays early or worked shortened sessions.

Amerco said its restructuring, including the new financing is anticipated to be in place by March 31, 2003.

"We have entered the standard contract for due diligence and will continue to work expeditiously to meet the objectives of the company," said Joe Shoen, president and chairman, in a news release.

Previously, the company announced that it reached a stand-still agreement with its banks, KBC Bank, Lasalle Bank National Association, Washington Mutual Bank, U.S. Bank National Association, Fleet National Bank, Wells Fargo Bank, Citicorp USA Inc., Bank One, Bank Of America and JP Morgan Chase Bank.

During this standstill period, Amerco will restructure it balance sheet in order to pay its banks $205 million owed under the three-year credit facility. Banks will continue to receive interest on the outstanding debt and information regarding the restructuring.

The company is currently working towards finalizing a standstill agreement with the members of the ad hoc committee of bondholders. Under the agreement, it is expected that bondholders will agree not to take any action with respect to the nonpayment of the bonds for a period of time while the refinancing is completed.

"Under the guidance of Crossroads LLC, a nationally recognized restructuring firm, we are making significant progress in restructuring the Company's balance sheet," said Shoen. "Not all creditors are on board yet, but we are pleased to report this progress and hope that the others will soon come along."

No other details could be obtained on Amerco's new financing by the time Prospect News went to press.

Amerco is a Reno, Nev. holding company for U-Haul International, Inc., Amerco Real Estate Co., Republic Western Insurance Co. and Oxford Life Insurance Co.

In follow-up news, Scientific Games Corp. closed on its $340 million credit facility, consisting of a $50 million revolver (that can be increased to $70 million) due 2006 and a $290 million term loan B due 2008. Bear Stearns was the lead bank on the deal.

The loan is guaranteed by all current and future, direct and indirect, wholly-owned domestic subsidiaries and is secured by a first priority security interest in all present and future tangible and intangible assets of those subsidiaries.

As of closing, the company has not drawn any borrowings from the revolver and has approximately $24 million in cash and equivalents.

Due to this refinancing of the company's credit facility and the previously announced repayment of subordinated notes, the company anticipates its annual interest cost in 2003 will be approximately $26 million compared to approximately $41 million in 2002.

Scientific Games is a New York provider of systems and products for instant-ticket lotteries and pari-mutuel wagering.

Del Monte Foods Co. closed on its $1.245 billion credit facility on Friday in conjunction with closing on the acquisition of certain H.J. Heinz Co. businesses.

"This is a transformative transaction for Del Monte and one that strategically positions us as a stronger, more diverse and more competitive company in the U.S. retail market," said Richard G. Wolford, chairman and chief executive officer of Del Monte, in a news release. "Leveraging our proven Del Monte Go-to-Market infrastructure, we plan to realize the full potential these new businesses represent.

"We will have a financially stronger company with an improved capital structure that will further enable us to deliver increased stockholder value," Wolford added.

The San Francisco, Calif. processed food company's bank loan consists of a $300 million six-year revolver (down from $350 million) with an interest rate of Libor plus 350 basis points, a $195 million six-year term loan A (down from $250 million) with an interest rate of Libor plus 350 basis points, approximately €45 million eight-year term loan B with an interest rate of Libor plus 375 basis points and a $705 million eight-year term loan B with an interest rate of Libor plus 375 basis points.

Bank of America, JPMorgan Chase, UBS Warburg, Morgan Stanley and Bank of Montreal were the lead banks on the deal.

Hercules Inc. closed on its new $325 million credit facility (Ba1/BB) to refinance its existing $200 million senior secured revolving credit facility.

The new facility, also senior secured, is a $125 million four-year revolver at Libor plus 275 basis points and a $200 million 41/2-year term loan at Libor plus 325 basis points.

The Wilmington, Del. specialty chemical company will use proceeds to redeem its 6.625% senior notes when they mature on June 1, 2003 and for working capital and ongoing liquidity.

Credit Suisse First Boston and Wachovia Securities were joint lead arrangers for the new facility.

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