American Axle term loan stays firm; Jarden, West get approvals for amendments/extensions

By Sara Rosenberg

New York, Aug. 19 - American Axle & Manufacturing Holdings Inc.'s term loan was unchanged to stronger, depending on who was asked, with levels continuing to be affected by news of a payment agreement and second-lien term loan, both with General Motors Co.

In other loan happenings, Jarden Corp. and West Corp. both received enough consents from lenders to pass their amendments that involve extending a portion of their institutional term loan borrowings.

American Axle still strong

American Axle's term loan continued to see positive attention during Wednesday's trading session as investors were still reacting to the company's announcement that it will get a payment and a second-lien term loan from General Motors, according to traders.

The term loan was quoted by one trader at 86 bid, 88 offered, up from Tuesday's levels of 85½ bid, 87½ offered, and from Monday's levels of around 79½ bid, 81½ offered.

However, a second trader saw the term loan at 86½ bid, 88½ offered, unchanged from Tuesday. This trader had the loan quoted at 80½ bid, 82½ offered on Monday.

Under the agreements, General Motors will make a $110 million payment to American Axle to, among other things, cure costs associated with Motors Liquidation Co.'s bankruptcy cases and resolve outstanding commercial obligations between the parties.

American Axle second-lien

In addition, General Motors will provide American Axle with a new $100 million second-lien term loan due Dec. 31, 2013 that will be available in multiple draws, with a minimum draw size of $25 million, through Sept. 30, 2013.

The payment and second-lien loan are subject to American Axle amending its credit facility, and negotiation and execution of definitive agreements.

American Axle is a Detroit-based producer of driveline and drivetrain systems, and related components and chassis modules for the automotive industry.

Jarden passes

Jarden's amendment proposal was okayed by investors on the back of the company increasing the consent fee to 15 basis points from 5 bps on Tuesday morning, according to a market source.

Under the amendment, the company gained the ability to extend a portion of its term loan B debt to Jan. 24, 2015 through the creation of a new term loan B-4 tranche and pricing on this extended debt is set at Libor plus 325 bps with no Libor floor.

The company's existing term loan B debt is currently due in 2012. There is a B-1 that is priced at Libor plus 175 bps, a term loan B-2 that is priced at Libor plus 175 bps and a term loan B-3 that is priced at Libor plus 250 bps.

Last week, the company expressed to lenders that it is willing to upsize the term loan B-4 to $750 million from an originally proposed size of $600 million as long as half of that amount comes from term loan B-3 rollover and the other half comes from term loan B-1 and B-2 rollover.

By late-day Wednesday, there was still no word on the final size of the B-4 tranche, the source added.

Jarden can sell notes

Jarden's amendment also allows for the sale of secured notes that would be used to pay down term loan B borrowings at par.

Other amendment terms include allowing Deutsche Bank, JPMorgan and Barclays to be issuers of letter of credit, and increasing the permitted receivables basket to $400 million from $250 million and the general debt basket to $150 million from $75 million.

Deutsche Bank acted as the lead bank on the amendment.

Consents had been due at 5 p.m. ET on Tuesday.

Jarden is a Rye, N.Y.-based consumer products company.

West gets lender nod

West was another company to get approval from lenders on an extend-and-amend proposal, according to a market source.

Under the amendment, the company received permission to extend the maturity on $700 million of term loan borrowings until 2016 from 2013.

The extended term loan is priced at Libor plus 387.5 bps, up from current pricing of Libor plus 237.5 bps.

During the amendment process, the company extended the consent deadline twice, first to the close of business on Tuesday and then to noon on Wednesday.

In addition, the company increased pricing on the extended loan from initial price talk of Libor plus 362.5 bps, added two years of 101 soft call protection, and added a springing maturity at 91 days prior to the senior notes maturity in 2014, subject to a 2.8 times net secured leverage test.

Deutsche Bank, Wells Fargo and Bank of America acted as the lead banks on the amendment.

West is an Omaha, Neb.-based provider of outsourced communication services.

American Dental readies close

American Dental Partners Inc. is nearing completion of its $130 million senior secured credit facility due August 2012, with the company targeting Friday as the closing date, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

The facility consists of a $50 million revolver and an $80 million term loan, with initial pricing on the tranches outlined as Libor plus 600 bps. Pricing can range from Libor plus 525 bps to 600 bps based on the company's debt coverage ratio.

There is also an unused fee that can range from 37.5 bps to 62.5 bps, with the initial rate set at 62.5 bps.

Covenants include minimum net worth, and leverage and fixed-charge coverage ratios.

KeyBank, RBS and Bank of America are the lead arrangers on the deal, with KeyBank the administrative agent. Participating lenders are expected to include TD Bank, Regions Bank and CapitalSource Bank.

American Dental refinancing loan

Proceeds from American Dental's credit facility will be used to help refinance its existing credit facility and can also be used for general corporate purposes, including working capital, acquisitions and affiliations and capital expenditures.

Other funds for the refinancing and for general corporate purposes will come from the sale of 2.26 million shares of common stock.

At closing, the company expects the term loan to be fully funded and the revolver to have borrowings of about $5 million.

Based on financial covenants, and accounting for the draw, it is expected that there will be $39 million available for borrowing under the revolver.

American Dental Partners is a Wakefield, Mass.-based provider of dental facilities, support staff and business services to dental group practices.

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