Wackenhut term loan B more than 50% subscribed ahead of Wednesday's launch date

By Sara Rosenberg

New York, June 16 - Wackenhut Corrections Corp.'s $100 million term loan B has received over $50 million in commitments prior to the launch, which isn't scheduled to take place until Wednesday. Most of these commitments are from people who are familiar with and like the credit, as opposed to people who are looking at the deal as a yield play.

"We've had over 50% commitments to the B ahead of the bank meeting," a source close to the deal told Prospect News on Monday, adding that most of the commitments came in on Thursday and Friday of last week.

Price talk on the term loan B is Libor plus 375 basis points, 25 basis points lower than the interest rate on the existing term loan B. The facility also contains a $50 million revolver with an interest rate of Libor plus 300 basis points, same as the interest rate on the existing facility.

"The commitments that have come in are based on people that really know and like the credit," the source continued. "They're either existing lenders or people who wanted to be existing lenders when the deal came out last year."

In December 2002, the company obtained a $175 million senior secured facility (Ba3/BB), consisting of a $50 million five-year revolver with an interest rate of Libor plus 300 basis points and a $125 million six-year term loan with an interest rate of Libor plus 400 basis points and a Libor floor of 2% for the first 18 months. BNP Paribas and Wachovia Securities, Inc. acted as co-lead arrangers on the deal that was used to purchase four properties for approximately $155 million.

Proceeds from this new $150 million credit facility will be used by the Palm Beach Gardens, Fla. correctional and detention facilities company to repurchase all common stock held by Group 4 Falck A/S.

BNP Paribas is leading the new deal.

In follow-up news, Owens-Illinois Inc. closed on its new $1.9 billion senior secured credit facilities (B1/BB), consisting of a $600 million revolver due April 1, 2007, a $460 million term loan A due April 1, 2007 and an $840 million term loan B due April 1, 2008. Deutsche Bank and Bank of America were the lead banks on the deal.

All of the tranches have an interest rate of Libor plus 325 basis points, an increase of 75 basis points over the previous facility.

Initially the deal was expected to consist of a $650 million revolver, a $500 million term loan A and a $750 million term loan B. And, the term loan B was originally priced at Libor plus 350 basis points.

Security is substantially all assets of the company's domestic subsidiaries and certain foreign subsidiaries, a pledge of the intercompany debt and equity in most of the domestic subsidiaries and certain stock in certain foreign subsidiaries.

Proceeds will be used by the Toledo, Ohio manufacturer of packaging products to repay all amounts outstanding under the company's $1.9 billion credit facility, which had been scheduled to mature on March 31, 2004.

Accuride Corp. closed on its new $246 million credit facility, consisting of a $66 million three-year revolver (B2/B+) with an interest rate of Libor plus 400 basis points and a $180 million four-year second lien term loan (B3/B-) with an interest rate of Libor plus 625 basis points. Citigroup Global Markets Inc. and Lehman Brothers Inc. were joint lead arrangers on the deal. Deutsche Bank Trust Co. Americas is the documentation agent.

Proceeds will be used to refinance the existing revolver, term loan A and term loan B.

The company obtained the new facilities as part of an amendment and restatement of its senior secured bank credit agreement. Under the amendment, the existing term loan C will remain outstanding. In addition, the company's financial covenants were adjusted to provide greater flexibility.

Furthermore, total liquidity was improved to over $70 million estimated at close with $41 million of unused revolver capacity, a deferral of principal maturities to 2006 and beyond and a minimization of amortizations to $2 million per year in 2004-2005.

"We are very pleased with the results of our refinancing. It paves the way for the successful execution of our business plan. We anticipate that our revised capital structure will not only provide the tolerance to deal with the current industry downturn but also provide the flexibility for the future upturn that we are now just beginning to see," said John Murphy, executive vice president and chief financial officer, in a news release.

Accuride is an Evansville, Ind. manufacturer and supplier of wheels for heavy/medium trucks and trailers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.