AM General $615 million credit facility to launch Wednesday

By Sara Rosenberg

New York, Aug. 3 - AM General Corp. is scheduled to hold a bank meeting on Wednesday to launch its proposed $615 million credit facility, according to a market source. Citigroup is the sole lead bank on the deal.

The facility consists of a $50 million five-year revolver with an interest rate of Libor plus 300 basis points, a $400 million seven-year first-lien term loan with an interest rate of Libor plus 300 basis points and a $165 million second-lien term loan C with an interest rate of Libor plus 525 basis points, the source said.

Currently, AM General is owned by Renco Group Inc. However, a new holding company is being formed through a contribution partnership with MacAndrews & Forbes and Renco. Under the partnership, MacAndrews would have a majority stake of the company and Renco would have a minority stake. A portion of the proceeds from this credit facility will go toward the new holding company and a portion will go toward debt repayment, the source added.

AM General is a South Bend, Ind., military and special purpose vehicles company.

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