Sola term loan B reverse flexes to Libor plus 250 basis points; CamelBak breaks at par levels

By Sara Rosenberg

New York, Nov. 21 - Sola International Inc.'s $175 million six-year term loan B was reverse flexed on Friday by 50 basis points and a 25 basis points step down was added based on leverage to the tranche as overwhelming demand by institutional investors allowed the company to take advantage of lower rates.

Meanwhile, CamelBak's $100 million senior secured credit facility allocated and broke for trading in the secondary on Friday with the term loan B quoted at par bid, par ½ offered, according to a trader, who added that no trades really took place on the paper as investors seemed unwilling to sell.

Sola's term loan B is now priced at Libor plus 250 basis points compared to original pricing of Libor plus 300 basis points. Furthermore, the interest rate can drop to Libor plus 225 basis points, if the company's leverage falls to 1.75 times, according to a market source.

The deal's success is really no surprise since the bank meeting was reported to be well attended with more than 90 investors participating and a number of commitments had already been received on the day of the launch. Plus, by a few days after the bank meeting, the institutional tranche was reported as being at least three times oversubscribed.

And, now that pricing on the deal has been lowered, committed investors are not expected to drop their positions since the new interest rate is considered "pretty much a market level," the source added.

The facility (Ba3/BB-) also contains a $50 million five-year revolver priced with an interest rate of Libor plus 300 basis points.

UBS Investment Bank and JPMorgan are joint lead arrangers and bookrunners, with UBS listed on the left. Union Bank of California, a participant in the company's existing credit facility, signed on as administrative agent prior to the deal's launch and, in fact, was one of the only early commitments received.

Proceeds will be used to refinance existing debt.

Sola is a San Diego designer, manufacturer and global distributor of plastic and glass eyeglass lenses.

CamelBak's credit facility, which is expected to close early next week, consists of a $20 million five-year revolver and an $80 million six-year term loan, both priced with an interest rate of Libor plus 425 basis points.

The term loan B did end up being oversubscribed prior to the closing of syndication, a market source said. At the beginning of last week, the term loan was reported by market sources as only having five commitments totaling $34 million.

BNP Paribas and Bank of New York are the lead banks on the deal, with BNP listed on the left.

Proceeds will be used to help support the acquisition of 100% of CamelBak's capital stock by the existing sponsor.

CamelBak is a Petaluma, Calif., producer of personal hydration systems.

In follow-up news, Plains All American Pipeline LP closed on its new $750 million senior unsecured credit facilities to refinance its existing bank debt and $200 million uncommitted facility for the purchase of hedged crude oil, according to a company news release.

Fleet Securities Inc. acted as lead arranger and book manager, Fleet National Bank acted as administrative agent, Bank One and Wachovia Bank acted as co-syndication agents, and Bank of America and Fortis Capital Corp. acted as co-documentation agents.

The unsecured $750 million credit facility consists of a $425 million four-year U.S. revolver, a $170 million 364-day Canadian revolver with a five-year term-out option, a $30 million four-year Canadian working capital revolver and a $125 million 364-day revolver.

The $200 million hedged inventory facility is secured by the inventory purchased under the facility and the associated accounts receivable, and will be repaid from the proceeds from the sale of the inventory.

"The closing of these new credit facilities is a significant event for the Partnership and illustrates the strong support we have from our top-tier lenders and other members of our bank group," said Phillip D. Kramer, executive vice president and chief financial officer, in the release. "The unsecured structure of the committed credit facilities recognizes the financial discipline with which we have executed our business plan and reinforces our steadfast commitment to maintaining a conservative capitalization."

The new facilities provide greater financial flexibility, acknowledge the investment-grade credit quality of the partnership and provide for significant cost savings relative to the previous credit facilities, stated Al P. Swanson, treasurer, in the news release.

Plains All American Pipeline is a Houston-based oil and liquefied petroleum gas transportation and terminalling company.

Berry Plastics announced that it completed the acquisition of Landis Plastics Inc. for the total consideration of $228 million, including repayment of existing debt.

To help fund this transaction, the company obtained a new $380 million credit facility (B1), consisting of a $330 million term loan C with an interest rate of Libor plus 250 basis points and a $50 million delayed draw term loan with an interest rate of Libor plus 250 basis points.

The company also used an equity investment from Berry's existing investors and cash from Berry's balance sheet to help fund the acquisition.

Goldman Sachs and JPMorgan were the lead banks on the bank deal.

Berry Plastics is an Evansville, Ind., manufacturer and marketer of plastic containers, closures, drink cups and housewares.

© 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.