TriMas bringing new $500 million loan via JPMorgan Chase and CSFB

By Sara Rosenberg

New York, May 14 - News of TriMas Corp.'s new $500 million bank loan was released Tuesday and the offering even went out to some agents, according to market sources. JPMorgan Chase and Credit Suisse First Boston are co-leads on the deal. TriMas is also expected to issue new subordinated notes and obtain new equity as part of a proposed spin-off from its parent company, Metaldyne, according to market sources.

A bank meeting for the credit facility has not yet taken place, according to a trader. He anticipates that one will be held within the next week or so.

The new loan consists of a $300 million term B and a $200 million pro rata portion. The term B is likely to have an interest rate in the range of Libor plus 275 basis points to Libor plus 300 basis points, according to market sources. There is call protection on the B loan of 101.

Initially, according to the trader, the company will probably have an interest rate of Libor plus 300 basis points and if the deal goes well it will flex down to 275 basis points.

The syndicate was not immediately available to confirm this information.

Metaldyne's leverage is very high, according to a market researcher, which is why TriMas is separating from the company. Currently, Metaldyne has a leverage ratio of 5.2 times. It is expected that the leverage ratio will drop to 4.3x after the spin-off, the researcher said, since proceeds from the new TriMas debt will be used to pay down Metaldyne's debt.

Secondary bank loan market prices remain high as demand outweighs supply. In addition, the positive performance of the equities market Tuesday lent extra support to "Street names and on the run issuers", according to a market professional. Otherwise, it was a "run of the mill day" and fairly quiet, the professional added.

WorldCom Inc.'s 2002 loan was bid around 96½ and offered around 971/2. Trading levels on the company's paper are always moving around, according to the professional, depending on how people feel that day.

Late Monday, WorldCom's stock was removed from the S&P 500 Index and its debt downgraded to junk status by all three rating agencies last week.

Coming up this week in primary activity, Columbia House Co. is scheduled to hold a second bank meeting Wednesday in New York for its new $175 million credit facility. UBS Warburg and Bank of America are co-leads on the deal.

The loan, which is secured by all assets, consists of a $30 million five-year revolver with an interest rate of Libor plus 450 basis points and a $145 million five-year term with an interest rate of Libor plus 450 basis points. Proceeds combined with sponsored contributed equity will be used to help fund a leveraged buyout by Blackstone Group.

Columbia House is a New York, N.Y. direct marketer of music and videos.

Also, Herbalife International Inc. is scheduled to hold a bank meeting Thursday for its new $190 million credit facility. UBS Warburg is sole lead on the deal.

The loan consists of a $25 million five-year revolver with an interest rate of Libor plus 375 basis points and a $165 million six-year term loan B with an interest rate of Libor plus 400 basis points, according to a syndicate source. Proceeds will be used to help fund a leveraged buyout by Whitney & Co. LLC and Golden Gate Capital Inc.

Herbalife, headquartered in Los Angeles, Calif., is a network marketing company that sells weight management products, nutritional supplements and personal care products.

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