JohnsonDiversey allocating $550 million pro rata; Bear Stearns holds credit conference

By Sara Rosenberg

New York, April 24 - JohnsonDiversey's new loan stood out in a quiet session in the bank debt market Wednesday. The company is expected to allocate the $550 million pro rata portion of its new credit facility this week, according to a syndicate source. Meanwhile the $550 million 7½ year term loan B was allocated on Friday and is currently trading at 101 to 101.5. Also on Wednesday - and contributing to the lack of activity - Bear Stearns & Co. held its 11th annual credit research conference.

JohnsonDiversey's (Ba3/BB-/BB-) pro rata portion consists of a $300 million six-year revolver and a $250 million six-year term A. The term B was priced with an interest rate of Libor plus 375 basis points. The revolver and term A were priced with an interest rate of Libor plus 325 basis points. The Sturtevant, Wis. provider of cleaning products' loan is expected to close May 3, the syndicate source said. Company stock and assets secure the credit facility and proceeds will be used to help fund the acquisition of DiverseyLever.

Meanwhile, at the Bear Stearns conference, companies announced future plans in terms of debt restructuring and deleveraging.

Pinnacle Entertainment Inc., a Glendale, Calif. gaming company, revealed that it is considering restructuring its current credit facility for the purpose of lowering interest rates. The company currently has a $110 million bank loan that is completely undrawn. The restructuring of the loan could occur in the "very near future", according to Daniel Lee, the company's chairman and chief executive officer. (See story on page one of this issue)

Another presenter at the conference, SBA Communications Corp., a Boca Raton, Fla. developer of wireless communications structures, is planning to reduce its debt leverage ratio "to somewhere in the nines" from last year's figure of 11.2, according to Jeffrey Stoops, president and chief executive officer. Debt deleveraging is expected to occur through "organic growth", Stoops said. (See story elsewhere in this issue)

In other news, Kwik Trip held a bank meeting Tuesday for its $240 million credit facility. The meeting was mainly for existing lenders. Wachovia was sole lead arranger and administrative agent. The loan consists of a $190 million five-year revolver and a $50 million five-year term A. Both the revolver and the term were priced with an interest rate of Libor plus 175 basis points, a syndicate source said. The La Crosse, Wis. convenience store chain's loan is expected to close by the end of May.

According to the syndicate, the deal is already oversubscribed.

Coming up in the primary is Silgan Holdings Inc.'s bank meeting Thursday regarding its new $800 million senior secured credit facility (Ba2/BB-) for top tier lenders. Deutsche Bank and Bank of America are co-lead arrangers on the deal. Salomon Smith Barney and Morgan Stanley are top tier agents in the syndicate.

The loan consists of a $400 million six-year revolver with an interest rate of Libor plus 200 basis points, a $100 million six-year term A with an interest rate of Libor plus 200 basis points and a $300 million six-and-half-year term B with an interest rate of Libor plus 250 basis points, according to the syndicate. The credit facility agreement also contains provisions for an incremental uncommitted term loan of up to $250 million, according to a company press release. Proceeds from the new loan and from an issuance of an additional amount of its 9% senior subordinates debentures due 2009 will be used to refinance in full its existing U.S. senior secured credit facility.

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