ILC launches to positive reception; Ozburn-Hessey cuts spreads; Wastequip breaks in 101s

By Sara Rosenberg

New York, Aug. 2 - ILC Industries Inc.'s credit facility was greeted with a favorable reception from investors as the deal has already started to catch some firm interest. Meanwhile, Ozburn-Hessey Logistics LLC cut pricing on its in-market deal for the second time in under a week, spurred on by massive oversubscription.

In the secondary, Wastequip Inc.'s new deal freed up for trading on Tuesday, with the first-lien term loan B quoted in the 101 context.

ILC Industries' $302.5 million credit facility has started its syndication process with good momentum as tickets for the deal had already started coming in by Tuesday afternoon - even though the bank meeting had just taken place in the morning, according to a market source.

The facility consists of a $30 million six-year revolver talked at Libor plus 275 basis points, a $195 million 61/2-year first-lien term loan talked at Libor plus 275 bps and a $77.5 million seven-year second-lien term loan facility talked at Libor plus 650 bps.

The second-lien term loan contains call protection of 102 in year one and 101 in year two.

Both term loans are being offered to investors at par.

UBS and GE Capital are the lead banks on the deal that will be used to support Behrman Capital's dividend recapitalization of the company.

ILC is a Bohemia, N.Y., defense electronics and engineered softgoods provider.

Ozburn-Hessey trims pricing

Ozburn-Hessey reverse flexed pricing on both its $140 million seven-year term loan B and its $40 million five-year revolver to Libor plus 250 bps from Libor plus 275 bps, according to a market source. This is the second flex made to the deal as pricing on both tranches had been reduced from initial price talk of Libor plus 300 bps late last week.

The step down that was added to the term loan B credit agreement late last week, under which pricing could drop to Libor plus 250 bps at 2.5x leverage, was removed, the source added.

The term loan is being offered to investors at par, and a $10 million revolver commitment gets an upfront fee of 75 bps.

Morgan Stanley and Bear Stearns are joint lead arrangers and joint bookrunners on the $180 million credit facility (B2/B+), with Morgan Stanley the left lead.

Proceeds from the term loan will be used to help fund a leveraged buyout of the company by Welsh, Carson, Anderson & Stowe.

The revolver will be undrawn at closing and will be available for general corporate purposes.

Welsh, Carson, Anderson & Stowe is putting in 63% of the money for the LBO consisting of $80 million of holding company mezzanine debt and $157 million of equity.

Following the transaction, senior leverage will be 31/2x and total leverage through the holding company will be 51/2x.

Ozburn-Hessey is a Nashville-based third-party logistics provider.

Wastequip breaks

Wastequip's $155 million six-year term loan B (B2/B+) freed up for trading during market hours, with the paper quoted at 101 bid, 101½ offered on the break and remaining at those levels until the close, according to a trader.

The term loan B, which was upsized from $140 million during syndication, is priced with an interest rate of Libor plus 250 bps.

Wastequip's $255 million credit facility also contains a $60 million seven-year second-lien term loan (B3/B-), which was downsized from $75 million, priced with an interest rate of Libor plus 600 bps and a $40 million five-year revolver (B2/B+) priced with an interest rate of Libor plus 275 bps and containing a 50 basis point commitment fee.

Credit Suisse First Boston is the sole lead arranger on the deal that will be used to help fund DLJ Merchant Banking Partners' leveraged buyout of Wastequip from CIVC Partners.

Wastequip is a Beachwood, Ohio, designer, manufacturer and marketer of equipment used to collect, process and transport solid and liquid waste materials.

Integrated Electrical closes

Integrated Electrical Services Inc. closed on a new $80 million senior revolving credit facility that was used to replace its previous credit facility, according to a company news release. Bank of America is administrative agent on the deal.

Borrowings will be used to fund working capital needs.

"The refinancing of our senior credit facility is a very important event for IES because of the financial flexibility it provides," said Byron Snyder, chairman and chief executive officer, in the release. "We greatly appreciate Bank of America's efforts in expediting the closing of this new credit facility and look forward to working with our new senior lenders."

Originally, the company launched a $100 million five-year asset-based revolving credit facility on July 12 via Credit Suisse First Boston, but, like market rumors expected, that deal was pulled.

It was then thought that the deal, which was resurfacing via Bank of America, would be sized anywhere from $100 million to $110 million, although as can be seen with the company's Tuesday announcement, that number ended up being slightly smaller than anticipated.

Integrated Electrical Services is a Houston-based provider of electrical solutions to the commercial and industrial, residential and service markets.

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