Graham Packaging meeting "well attended"; Terex sees benefit from strong market

By Peter Heap

New York, June 11 - Graham Packaging Co.'s new $700 million credit facility is "gaining momentum," a source familiar with the deal said after the bank meeting Tuesday.

"The meeting went very well," according to the source. "It was very well attended. The deal seems to be gaining momentum; orders are coming."

Graham Packaging is entering into the new bank line alongside its initial public offering. The $700 million facility, via lead arrangers Deutsche Bank and Citibank, is made up of a $550 million seven-year term B at Libor plus 250 basis points and a $150 million five-year revolver at Libor plus 250 basis points.

The York, Pa. plastic container company is also selling $100 million of new senior subordinated notes as part of the overall refinancing, intended to reduce debt and interest expense and extend maturities.

Fees for the new loans are 1 1/8 for a $15 million commitment on the revolver while the term B is being offered at par.

Also scheduled for Tuesday was the bank meeting for Six Flags Inc.'s $1.050 billion credit facility via Lehman Brothers. No information could be obtained on how the Oklahoma City, Okla. theme park operator's meeting went. The facility is made up of a $600 million seven-year term B, a $300 million six-year revolver and a $150 million multi-currency six-year revolver.

Meanwhile, Terex Corp. told Prospect News Tuesday that it is benefiting from the current strength of demand for bank loans.

The Westport, Conn. maker of capital equipment is currently in the market with a $675 million credit facility, made up of a new $375 million term loan B due 2009 and an amendment to its $300 million revolver that extends the maturity to June 2007 from March 2004. Credit Suisse First Boston and Salomon Smith Barney are joint leads.

Out of the proceeds, $150 million will go to finance the acquisition of Demag Mobile Cranes GmbH & Co. KG. The remainder will be used to refinance Terex's existing term loan B and term loan C. At Dec. 31, 2001, Terex had $65 million outstanding on the existing term B, which expires in March 2005 and $152.9 million on the term C, which expires March 2006.

Closing on the new loan is expected for mid to late June - and won't wait for closing of the Demag acquisition which is anticipated early in the third quarter.

Compared to the loans being refinanced, "spreads are going to be tighter," Kevin O'Reilly, Terex's vice president of investor relations, told Prospect News.

"It's the market dynamics and how the company has changed since we did the last deal," he added although he acknowledged that it was "probably more the market conditions" that were responsible for the improved pricing.

Nonetheless, Terex has improved its balance sheet in recent years and within the last six months added $300 million of equity, O'Reilly said.

He declined to give rates on the new loan. The existing revolver has an all-in drawn cost of Libor plus 175 basis points while the term B is at Libor plus 275 basis points and the term C at Libor plus 300 to 325 basis points.

At March 31, Terex had $246 million of availability on its revolver.

Also Tuesday, Metaldyne Corp. said that in connection with a partial spin-off it TriMas Corp. closed on its new credit facility on June 6.

Trimas' new $500 million credit facility is via JPMorgan Chase and CSFB and is made up of a $300 million term B at Libor plus 300 basis points and a $200 million pro rata tranche.

The transaction also allowed Metaldyne to repay $496 million of term loans under its senior credit facility and reduce the outstanding borrowings on its receivables facility by $131 million of which $81 million is from the elimination of the TriMas receivables base.

Metaldyne said it is holding an additional $205 million in cash for further debt reduction, which it intends to use to redeem or repurchase at market prices part of its outstanding 4.5% subordinated debentures due 2003 before September 2002.

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