Aramark downsizes bond deal to $1.78 billion, drops subordinated tranche, shifts $490 million to term loan

By Paul A. Harris

St. Louis, Jan. 12 - Aramark Corp. has downsized its offering of senior notes (B3/B-) to $1.78 billion from $2.27 billion and has shifted $490 million to its term loan B, according to market sources.

The Philadelphia-based professional food, hospitality and facility management services company is now offering a $500 million tranche of eight-year floating-rate notes, non-callable for two years, with price talk of three-month Libor plus 350 to 375 basis points.

In addition Aramark is offering $1.28 billion of eight-year fixed-rate notes, non-callable for four years, with price talk of 8½% to 8¾%.

A planned $570 million tranche of senior subordinated notes has been withdrawn.

Books close 2 p.m. ET on Tuesday, except for West Coast accounts seeing the company on Tuesday.

Pricing is set for Wednesday morning.

JP Morgan and Goldman Sachs & Co. are joint bookrunners. Citigroup, Barclays Capital and Wachovia Securities are joint lead managers. Calyon Securities, GE Capital, HVB, Mitsubishi, NatCity Investments PNC Capital Markets, Rabo Bank and The Royal Bank of Scotland are co-managers.

Proceeds will be used to fund the approximately $8.3 billion leveraged buyout of the company by chairman and chief executive officer Joseph Neubauer together with funds managed by sponsors Thomas H. Lee Partners LP, Warburg Pincus LLC, JPMorgan Partners, GS Capital Partners and CCMP Capital Advisors.

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