Hayes Lemmerz launches $150 million second-lien term loan, keeps amendment proposal as is

By Sara Rosenberg

New York, March 22 - Hayes Lemmerz International Inc. launched a $150 million five-year second-lien term loan on Tuesday to new and existing lenders basically as a way to replace the €120 million offering of senior unsecured notes that was withdrawn the other week, according to a market source.

The company planned on using about half of the net proceeds from the notes offering for general corporate purposes and the balance to repay a portion of its term loan facility.

Because of this planned repayment, the company asked lenders on March 3 to reprice its $450 million term loan B at Libor plus 325 basis points from Libor plus 375 basis points.

But, the amendment was contingent on the paydown, so in order to work toward successful completion of the repricing, Hayes has now launched this second-lien term loan as a substitute for the bonds.

The second-lien term loan is talked at Libor plus 550 basis points, the source said.

The company is also still looking to amend some financial covenants and gain permission to use approximately 50% of the net proceeds from the proposed divestiture of the company's Commercial Highway Hub and Drum business for capital expenditures.

Citigroup is the lead bank on the deal.

Consents and commitments are due April 1.

Hayes Lemmerz is a Northville, Mich., supplier of automotive and commercial highway wheels, brakes and powertrains, and suspension, structural and other lightweight components.

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