Masonite deciding whether to syndicate $825 million bridge loan

By Sara Rosenberg

New York, April 4 - Masonite International Inc. is considering syndication of its $825 million subordinated bridge loan, with a decision on the matter likely to be made on Tuesday, according to a market source.

The 18-month bridge loan, which has a ten-year final maturity, will replace the company's previously planned $825 million two-part bond deal that was postponed because of unfavorable bond market conditions, the source said.

Deutsche Bank Securities, UBS Investment Bank and Scotia Capital are the lead banks on the bridge loan. They were also acting as joint bookrunners on the bond deal.

As was previously reported, price talk on the bond offering was said to have widened out considerably from initial price talk levels, with the $300 million eight-year senior floating-rate tranche (B3/B-) seeing demand at Libor plus 400 basis points, compared to initial price talk in the Libor plus 325 basis points area. The $525 million 10-year senior subordinated notes (Caa1/B-) saw demand at 10%, compared to initial price talk in the 9% to 9¼% range.

Masonite is already in-market with a $1.525 billion credit facility (B2/BB-) consisting of a $350 million revolving credit facility at Libor plus 250 basis points and a $1.175 billion term loan B at Libor plus 200 basis points. Pricing on the term loan B was reverse flexed from Libor plus 225 basis points in late March.

Scotia Capital (left lead and administrative agent) and Deutsche are co-lead arrangers on the credit facility, with Deutsche and UBS acting as co-syndication agents and SunTrust and Bank of Montreal acting as agents.

Proceeds from the bridge loan and the credit facility will be used to help fund Kohlberg Kravis Roberts & Co.'s acquisition of Masonite, a Mississauga, Ont.-based building products company.

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