Market curious to see how Dole allocations turn out as closing date nears

By Sara Rosenberg

New York, March 21 - While syndication on Dole Foods Co. Inc.'s term loan B was known to be a blowout, the status of syndication on the pro rata tranches raised some questions in the market place on Friday, with some market participants saying that people are waiting to see what allocations on the pro rata are going to look like. However, according to a syndicate source the deal is moving along smoothly and is close to completion.

"There are a lot of relationship banks there," the syndicate source said, adding the loan could potentially allocate as soon as Monday.

The facility contains a $575 million 51/2-year term loan B (downsized by $25 million following pricing of an upsized bond deal) with an interest rate of Libor plus 375 basis points. A Bermuda based subsidiary of Dole will be the borrower on this tranche. In addition to the B loan, there is a $250 million five-year term loan A with an interest rate of Libor plus 325 basis points that a U.S. subsidiary will be the borrower of and a $300 million five-year revolver (in dollars and euros) with an interest rate of Libor plus 325 basis points.

Proceeds re being used to help fund the buyout of Dole by DHM Acquisition Co., which is wholly owned by David H. Murdock.

Deutsche Bank, Scotia Capital and Bank of America are the lead banks on the loan.

Dole is a Westlake Village, Calif. producer and marketer of fresh fruit, vegetables and flowers.

Another loan that is expected to close "imminently," according to a syndicate source, is AmeriPath Inc.'s $290 million credit facility

The loan consists of a $225 million seven-year term loan B (reduced from $290 million after an upsized bond deal) with an interest rate of Libor plus 450 basis points and a $65 million (downsized from $75 million) six-year revolver with an interest rate of Libor plus 350 basis points.

Credit Suisse First Boston and Deutsche Bank are the lead banks on the credit facility. Proceeds of the facility and notes will be used to help fund the leveraged buyout of AmeriPath by Welsh, Carson, Anderson & Stowe.

AmeriPath is a Riviera Beach, Fla. provider of cancer diagnostics, genomic, and related information services.

Meanwhile, Peabody Energy closed on its new $1.05 billion senior secured credit facility on Friday, according to a news release. Furthermore, the company closed on its offering of $650 million 6 7/8% senior unsecured notes due 2013.

"We are pleased with the strong demand for Peabody's debt offering and our ability to receive an attractive coupon. Our new credit facility will enhance our financial flexibility, simplify our capital structure and provide access to currently low interest rates. Peabody's weighted average interest cost will decline approximately 200 basis points as a result of the refinancing," said Richard A. Navarre, executive vice president and chief financial officer, in a news release.

The loan consists of a $450 million seven-year term loan B with an interest rate of Libor plus 250 basis points and a $600 million five-year revolver with an interest rate of Libor plus 200 basis points. The revolver will initially be undrawn, excluding letter of credit.

At launch, the term loan B was sized at $600 million but was downsized after the pricing of an upsized bond deal.

Trading began on Thursday on the new loan, according to market sources. The loan was issued at par and immediately moved higher to par 3/8 bid, par ½ offered by the end of the day.

Lehman Brothers and Wachovia were the syndication agents, Fleet was the administrative agent and Morgan Stanley was the documentation agent on the St. Louis coal company's new loan.

A portion of the proceeds from the credit facility and the bonds will fund the tender offer for the existing 8 7/8% senior notes due 2008 and 9 5/8% senior subordinated notes due 2008. The remainder of the proceeds will be used to refinance other bank and institutional borrowings and for general corporate purposes.

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