Horizon Lines to launch $275 million loan, $250 million bonds this month

By Sara Rosenberg

New York, June 3 - Horizon Lines LLC is expected to hold a bank meeting for a proposed $275 million credit facility and launch a proposed $250 million bond offering around mid-to-late June, according to a market source.

UBS and Goldman Sachs are joint leads on the credit facility, with UBS listed on the left. ABN Amro is a co-agent, the source said.

The same three banks are involved in the bond offering but with Goldman Sachs listed as left lead.

The credit facility consists of a $25 million revolving credit facility with price talk of Libor plus 275 basis points and a $250 million term loan with price talk of Libor plus 300 basis points, the source continued, adding that this is still preliminary talk that may change subject to ratings.

Following the transactions, total leverage will be 5x and senior leverage will 2.5x.

Proceeds from the debt transactions will be used to help fund Castle Harlan Inc.'s previously announced acquisition of Horizon Lines from The Carlyle Group for $650 million. Castle Harlan Partners IV LP, an investment fund totaling $1.163 billion in commitments that closed last September, is the actual buyer of Horizon Lines.

Horizon Lines is a Charlotte, N.C., container shipping company.

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