Warner Chilcott readies allocations, expects to trade Tuesday; Rayovac oversubscribed

By Sara Rosenberg

New York, Jan. 14 - Warner Chilcott Corp. closed the books on its $1.79 billion senior secured credit facility (B) on Thursday, putting an end to the successful syndication process and changing the focus to getting allocations out as soon as possible so that the deal could free up for trading first thing next week. Meanwhile, the books on Rayovac Corp.'s term loan B have already filled, plus some, less than a week after launch.

The syndicate on Warner Chilcott was working on allocations on Friday, according to a trader, with the plan being that the deal will break for trading on Tuesday.

The recently upsized $1.4 billion seven-year term loan B and the $240 million seven-year delayed-draw term loan B are well oversubscribed, "with north of $2 billion in orders," a market source said.

"They have $2.5 billion in on the term B and the delayed-draw," the trader added.

The non-delayed-draw term loan B had been increased by $150 million earlier this week as the company's bond deal was decreased by $150 million to $600 million. This senior subordinated bond deal priced Thursday in-line with talk at par to yield 8¾%.

Both the term loan B and the delayed-draw term loan B are priced with an interest rate of Libor plus 275 basis points. The delayed-draw has a commitment fee of 137.5 basis points and is delayed-draw for one year.

The term loan B was offered to investors at par.

As for the $150 million six-year revolver, that too is oversubscribed, with something like seven or more banks committed to the tranche, excluding the four known agent banks, the source said.

The revolver is priced with an interest rate of Libor plus 250 basis points, with a 50 basis points commitment fee.

Deutsche Bank and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the deal with Deutsche left lead, CSFB is administrative agent, Deutsche is syndication agent, and JPMorgan and Morgan Stanley are co-documentation agents.

Proceeds from the term loan B, along with proceeds from the senior subordinated notes offering, will be used to help fund the acquisition of Warner Chilcott plc by DLJ Merchant Banking, JP Morgan Partners, Bain Capital and Thomas H. Lee.

The delayed-draw will be used for product acquisition.

Warner Chilcott is a United Kingdom-based branded pharmaceutical manufacturer and marketer.

Rayovac fills up

Rayovac Corp.'s $930 million term loan B (including the foreign currency tranches) is already oversubscribed as there is something like over $1 billion in orders from institutional investors, according to a market source. The bank meeting to launch the deal into syndication just took place this past Tuesday.

The term loan B consists of a $740 million U.S. tranche talked at Libor plus 225 to 250 basis points, a euro tranche in the equivalent of $140 million talked at Libor plus 275 basis points and a Canadian tranche in the equivalent of $50 million talked at Libor plus 225 to 250 basis points.

There are a couple of factors working in favor of this deal, with one of the key components being that Rayovac and the soon to be acquired company, United Industries Corp., each have existing, relatively large, loan lender groups - giving the new deal the potential for a lot of rollover commitments.

In addition, Rayovac has a good acquisition history, with management able to come through on synergy and cost saving promises, a source previously explained to Prospect News.

Rayovac is acquiring United Industries for a total value of approximately $1.2 billion including the assumption of approximately $880 million of United Industries debt - comprised of senior debt and senior subordinated notes - that will be redeemed or replaced and a cash tax benefit of $140 million.

In addition to helping fund the acquisition, proceeds from the facility will also be used to refinance Rayovac's existing credit facility.

Rayovac will issue $500 million of senior subordinated notes via Bank of America, Citigroup and Merrill Lynch to help fund the acquisition as well. Rayovac's existing bonds will remain outstanding following the acquisition so the newly capitalized company will have $850 million senior subordinated notes outstanding.

The transaction, which is expected to close in February, is subject to approval under the Hart-Scott-Rodino Anti-trust Improvements Act and other customary closing conditions. The transaction has been approved by United's shareholders.

Rayovac's approximately $1.23 billion credit facility (B1) also contains a $300 million revolver talked at Libor plus 225 basis points.

Bank of America, Citigroup and Merrill Lynch are the lead banks on the credit facility, with Bank of America left lead.

After closing on the deal, Rayovac's senior leverage will be approximately 2.6x and total leverage will be approximately 5x, according to the fund manager.

Commitments towards the credit facility are due on Jan. 28.

Rayovac is an Atlanta-based consumer products company and one of the largest battery, shaving and grooming, and lighting companies.

United Industries is a St. Louis-based manufacturer and marketer of consumer products for lawn and garden care and household insect control. Currently 83% of United is owned by Thomas H. Lee Equity Fund IV. It is anticipated that following the transaction Thomas H. Lee will hold an ownership position in Rayovac of approximately 25%.

American Commercial trades

American Commercial Lines LLC's recently distributed restructured bank debt traded around a bit during Friday's otherwise quiet pre-holiday session at unchanged levels, according to a trader.

The $225 million second-lien term loan A was quoted at 101 bid, 101½ to 101¾ offered and the $139 million third-lien term loan B was quoted at 102 bid, 102½ offered.

The term loan A is priced with an interest rate of Libor plus 400 basis points and the term loan B is priced with an interest rate of 10% and a 3% PIK.

There is no call protection on the deal.

JPMorgan and Bank of New York are the agents on the restructured debt that is being obtained in connection with the company's exit from bankruptcy to satisfy obligations to senior secured lenders.

The restructured debt first started trading on Thursday.

American Commercial Lines, a Jeffersonville, Ind.-based marine transportation and services company, filed for Chapter 11 protection on Jan. 31, 2003.

Petco closes

Petco Animal Supplies, Inc. said it closed on a new $200 million revolving credit facility due Jan. 31, 2010 on Thursday.

Wells Fargo Bank, NA is lead arranger, bookrunner and administrative agent for the lenders, Bank of America, NA is syndication agent and U.S. Bank NA and Union Bank of California, NA are documentation agents.

The revolver has a $125 million accordion feature through April 30, 2007 and $50 million after that.

Interest is at Libor plus a margin of up to 187.5 basis points, depending on the leverage ratio.

Petco, a San Diego specialty retailer of premium pet food, supplies and services, terminated its previous credit facility and used $65 million of borrowings under the new loan to repay the old one.

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