York Gets Additional Bank Lines As HLTs Gain in Respectability

In a further sign that high-quality leveraged financings are losing their stigma, York International Corp. is raising an additional $150 million in bank financing as part of its recapitalization.

Banking sources close to the deal said the company's $500 million bank package is being increased because of strong response from more than 30 financial institutions.

At the same time, York has scrapped plans for a private placement that was part of the original plan. The total debt remains unchanged, at $650 million. York will still be considered a highly leveraged transaction for regulatory purposes.

Chemical Banking Corp. and Canadian Imperial Bank of Commerce underwrote $300 million and were looking for at least $200 million. But the agents reportedly received upwards of $400 million to $600 million, convincing York to turn to banks for the rest.

Paying Off Debt

Proceeds will be used to retire existing bank debt and other higher cost debt.

York was taken private in a 1988 leveraged buyout by Citicorp Capital Partners for $750 million. It is now raising over $220 million in fresh equity, proceeds of which will pay down debt.

The financing consists of a $400 million four-year financing, and a $250 million line, increased from $100 million. Syndication closed yesterday, and the financing is expected to close my mid-September. Officials at the banks declined comment or could not be reached for comment.

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