BNY ConvergEx first-lien frees up in low pars, second-lien in high pars

By Sara Rosenberg

New York, Aug. 28 - BNY ConvergEx Group LLC's credit facility broke for trading during Monday's market hours, with the first-lien term loan quoted in the low-par context and the second-lien term loan quoted in the upper-par context.

More specifically, BNY ConvergEx's $420 million first-lien term loan B (B1/B+) was quoted at par ¼ bid, par ½ offered and the $180 million second-lien term loan (B3/B-) was quoted at par ½ bid, 101 offered, according to various sources.

The first-lien term loan B is priced with an interest rate of Libor plus 300 basis points and carries 101 soft call protection for one year. During syndication, pricing on this tranche was flexed up from original talk at launch of Libor plus 275 basis points with the addition of the soft call.

The second-lien term loan is priced with an interest rate of Libor plus 675 basis points and contains call protection of 102 in year one and 101 in year two. During syndication, pricing on this tranche was flexed up from original talk at launch of Libor plus 650 basis points.

BNY ConvergEx's $675 million credit facility also contains a $75 million revolving credit facility (B1/B+).

Merrill Lynch and Goldman Sachs are the lead banks on the deal, with Merrill the left lead. Morgan Stanley and Bank of New York are co-managers.

In addition to the credit facility, the company will be getting $100 million of mezzanine debt that is underwritten by Merrill and Goldman.

Leverage through the first lien will be 3.7x, leverage through the second lien will be 5.3x and leverage through the mezzanine will be 6.2x.

Proceeds from the credit facility, along with the mezzanine financing, will be used to help fund the creation of BNY ConvergEx Group by GTCR Golder Rauner, LLC, The Bank of New York Co. Inc. and Eze Castle Software.

BNY ConvergEx will be an agency brokerage and technology company offering a complete spectrum of pre-trade, trade and post-trade solutions for traditional money managers, hedge funds, broker-dealers, corporations and plan sponsors.

The new company is expected to be established by the end of September, pending regulatory approval.

B/E Aerospace closes

B/E Aerospace, Inc. closed on its $500 million credit facility (Ba3/BB+) consisting of a $200 million five-year revolver and a $300 million six-year term loan B, with both tranches priced at Libor plus 175 basis points, according to a company news release.

During syndication, pricing on the term loan B was reverse flexed from original price talk at launch of Libor plus 200 basis points as the tranche was something like 3x oversubscribed.

Also, during syndication, the size of the revolver was increased by $50 million from an original size of $150 million.

JPMorgan, UBS and Credit Suisse acted as joint lead arrangers and joint bookrunners on the deal, with JPMorgan the left lead.

Borrowings under the amended and restated credit facility, along with available cash on hand, were used to repurchase about $175 million principal amount of the company's 8½% senior notes due 2010 and to pay for the company's previously announced acquisition of Draeger Aerospace GmbH, both of which were completed on July 26.

The company plans to use a portion of the remaining term loan to pay for its previously announced acquisition of New York Fasteners Corp., which is expected to close during the third quarter.

B/E Aerospace initially funded the note repurchase and Draeger acquisition with a $225 million credit facility led by the same three banks consisting of a $150 million five-year revolver with an interest rate of Libor plus 175 basis points and a $75 million six-year term loan with an interest rate of Libor plus 200 basis points.

Upon announcing the completion of the tender offer and the entrance into the new credit facility in July, the company had said that it planned on raising a new term loan, the proceeds of which would be used to repay all outstanding amounts borrowed under the revolver, and to negotiate a new revolver at that time.

After giving effect to the transactions, the company's leverage ratio is around 3x and its net debt-to-net capital is around 43%.

B/E Aerospace is a Wellington, Fla., manufacturer of aircraft cabin interior products and an aftermarket distributor of aerospace fasteners.

Paramount closes

Paramount Resources Ltd. closed on its $150 million six-year term loan B (Caa1/CCC+), according to a company news release.

The term loan is priced with an interest rate of Libor plus 450 basis points and contains call protection of 102 in year one and 101 in year two.

UBS acted as sole lead arranger, bookrunner and syndication agent on the deal.

Proceeds were used to repay the company's existing revolver debt for general corporate purposes.

Paramount is a Calgary, Alta., oil and natural gas exploration and production company.

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