CS and GE Capital Launch Applica Pet Loan
July 2, 2008
The bank meeting to launch the $325 billion Applica Pet Products credit facility went on Tuesday, despite setbacks with the M&A deal. Credit Suisse and GE Capital Markets are marketing a $300 million first-lien term loan B and a $25 million revolver at Libor plus 500, with an OID of 98 and a 3.25 Libor floor.
The proceeds are meant to help finance the $915 million sale of Atlanta-based Spectrum Brand’s pet supply business to Applica’s parent company, Miramar, Fla.-based Salton. However, Spectrum’s existing senior lenders have objected to the terms of the sale.
Spectrum, a consumer products company whose brands include Rayovac and Remington, said the sale is still “in the best interests of the company and its shareholders.” The company said it “will comply with its obligations” to satisfy conditions needed to complete the sale, which had been expected in August.
The agreement was announced May 21. Spectrum’s pet division includes the Tetra and Dingo brands. Standard & Poor’s assigned the debt a BB rating, two notches above the B+ corporate credit rating, with a recovery rating indicating a 90% to 100% recovery of principal in the event of a payment default. Moody’s Investors Service assigned a B1 corporate family and debt rating.
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