Bankers Trust New York Corp. and CIBC Wood Gundy Securities Inc. are expected to bring a $1.5 billion leveraged loan for Philip Services Corp. to market today.
The loan will be used to refinance an existing $762 million loan, also led by Bankers Trust and CIBC, and to finance several acquisitions, as well as for general corporate purposes, the company said.
Hamilton, Ontario-based Philip Services is a waste management and environmental services company that has been buying up companies in the United States and Canada.
Philip's most recent acquisition, a $59.7 million deal for metal recycler Intermetco Ltd. that was announced this month, is the company's eighth since October.
Fifty banks have been invited to a meeting today in Toronto on the loan. Dresdner Bank and Royal Bank of Canada will act as documentation agents.
The loan will be structured as a five-year revolving credit, divided into U.S.-only, Canadian-only, and cross-border pieces, CIBC lenders said.
Eight lenders, most of which are in Philip's existing facility, will be asked to commit $100 million each at the managing agent level. They are Bank of Tokyo-Mitsubishi, Credit Lyonnais, Deutsche Bank, Societe Generale, Bank of Nova Scotia, PNC Bank, NationsBank, and Toronto-Dominion.
Pricing is based on a grid tied to leverage. It starts at 45 basis points over the London interbank offered rate at a ratio of two times total debt to earnings before interest, depreciation, taxes and amortization. Pricing tops out at 137.5 basis point over Libor at a leverage ratio of four times.
Separately, Goldman, Sachs & Co. said it will arrange and lead a new $140 million senior secured credit facility this month to finance an acquisition vehicle that will buy community newspapers.
Goldman's merchant banking unit, Goldman Sachs Capital II LP, will join with buyout sponsor Kelso & Co. and newspaper industry veteran Frank Shepherd to form 21st Century Newspapers Acquisition Inc. Mr. Shepherd is president and chief executive officer of 21st Century.
The company's first purchase will be Great Lakes Media Inc., which owns a portfolio of local Michigan newspapers, Mark DeNatale, Goldman's co-head of syndications, said Wednesday.
Goldman Sachs will act as arranger and syndication agent and fully underwrite the deal, and will name an administration agent.