Mountain Lake to launch $235 million credit facility on Monday

By Sara Rosenberg

New York, Sept. 11 - Mountain Lake Acquisition Co. is scheduled to hold a bank meeting on Monday to launch its proposed $235 million senior secured credit facility (B+), according to a market source.

SunTrust is the lead bank on the deal.

The facility consists of a $50 million five-year revolver and a $185 million term loan B, the source said.

Pricing on the revolver will be tied to a leverage grid, with the initial rate expected to be in the Libor plus 300 basis points range, the source continued. There is a 50 bps commitment fee on the tranche.

Price talk on the term loan B is Libor plus 400 bps, the source added.

Leverage at close will be around 4.2 times.

The facility has a full covenant package that includes a total leverage test, an interest coverage test and asset coverage.

Additional liquidity, predominately for letters of credit, will be provided to the company by a $140 million asset securitization facility led by SunTrust.

Proceeds will be used to help fund a tender offer to acquire all of the outstanding shares of class A common stock of U.S. Xpress Enterprises, Inc. for $20.10 per share, an increase from the originally proposed $20.00 per share price.

The proposed tender offer is expected to commence within one week.

The financing for this acquisition has been revised from original plans due to changes in the leveraged finance market since the original June 22 announcement date.

Under the initial commitment letter, the company was going to get a $432 million credit facility via SunTrust, consisting of a $50 million five-year revolver expected at Libor plus 275 bps, a $92 million seven-year synthetic letter-of-credit facility expected at Libor plus 275 bps, a $40 million seven-year delayed-draw synthetic letter-of-credit facility expected at Libor plus 275 bps, a $190 million seven-year term loan B expected at Libor plus 275 bps and an up to $60 million eight-year second-lien term loan expected at Libor plus 625 bps.

Mountain Lake is a company formed by Patrick E. Quinn and Max L. Fuller for this acquisition. U.S. Xpress is a Chattanooga, Tenn., truckload carrier.

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