Medex breaks in secondary, term loan B trades as high as par ¾ on first day in market

By Sara Rosenberg

New York, May 15 - Medex Inc.'s credit facility allocated on Thursday and broke in the secondary bank loan market, with the term loan B trading as high as par 3/4, a point above the original issue price of 993/4, according to sources. At the end of the day, the B loan was quoted at par 3/8 bid, par ¾ offered.

The new loan (B1/B+) consists of a $125 million six-year term loan B with an interest rate of Libor plus 400 basis points and a $25 million five-year revolver with an interest rate of Libor plus 350 basis points. Wachovia and Lehman are the lead banks on the deal.

Originally, the term loan was sized at $175 million but was reduced following the company's decision to upsize its bond offering by $50 million to a total of $200 million

Proceeds will be used to help fund Medex and One Equity's leveraged buyout by of the Jelco peripheral IV catheter business of Johnson & Johnson.

Medex is a Dublin, Ohio seller of disposable and non-disposable critical care products.

In other secondary news, there was an auction for $50 million of Corning Inc.'s bank debt on Thursday, according to a trader, who said the paper was selling in the low 90's. "Relative to the bonds it should be higher than that. The bonds yield around 6½%. So, whoever buys it is getting a good deal.

Corning is a Corning, N.Y. global, technology-based corporation.

As for the primary, a number of deals launched on Thursday including Colfax Corp., Oxford Industries Inc. and Interface Inc.

Colfax held a bank meeting for a $315 million credit facility, consisting of a $225 million term loan B with an interest rate of Libor plus 375 basis points, a $50 million revolver with an interest rate of Libor plus 325 basis points and a $40 million senior second priority term loan with an interest rate of Libor plus 625 basis points. Merrill Lynch is the lead bank on the loan.

Proceeds will be used to refinance existing senior indebtedness and to provide cash consideration for the acquisition of Netzsch Group. The transaction is expected to be completed this month.

Colfax is a Richmond, Va. provider of fluid handling and power transmission products. Netzsch is a Selb, Germany producer of pumps, grinding and dispersing equipment, filtration systems, and analyzing and test equipment.

Oxford Industries held the retail launch of its $295 million five-year senior secured revolver with price talk is Libor plus 250 basis points. SunTrust Capital Markets Inc. and Merrill Lynch Capital are the joint lead arrangers on the deal.

For about two weeks before the general syndication launch, the syndicate focused on putting some agents together. The general syndication process is expected to continue until the facility closes in early June.

Proceeds from the revolver will be used in part to help fund the acquisition of all of the outstanding capital stock of Viewpoint International Inc., owner of the Tommy Bahama brand, in a transaction valued at up to $325 million consisting of $240 million in cash, $10 million in Oxford stock and up to $75 million in contingent payments.

Asked why the company opted to seek a new revolver as opposed to using term loans to help fund the transaction, a syndicate source previously explained that since the company is a consumer business that deals with apparel, its debt usage is seasonal and a revolver lends itself more to the up and down seasonal borrowing of the business.

Oxford Industries is an Atlanta manufacturer and marketer of branded and private label apparel. Viewpoint is a Seattle designer and marketer of relaxed sportswear.

Interface held a bank meeting for a $100 million five-year revolving credit facility (B2/B+) with an interest rate of Libor plus 300 basis points. Wachovia is the lead bank on the deal.

Proceeds will be used to refinance existing debt.

Interface is an Atlanta manufacturer, marketer, installer and servicer of products for the commercial and institutional interiors market.

In follow-up news, Central Garden & Pet Co. closed on a new $200 million senior secured credit facility (Ba2/BB+), consisting of a $100 million five-year revolver with an interest rate of Libor plus 225 basis points and a $100 million six-year term loan with an interest rate of Libor plus 300 basis points. CIBC and SunTrust were the lead banks on the deal.

Net proceeds from the new facility will be used to retire outstanding debt under the existing $175 million asset-based revolver, which is being replaced by the new facility, and other existing debt as well as provide capital for general corporate purposes and acquisitions and investments.

Central Garden & Pet is a Lafayette, Calif. distributor of lawn and garden and pet supply products.

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