Magazine article American Banker

Chemical, BT Leading $1.5 Billion Credit

Magazine article American Banker

Chemical, BT Leading $1.5 Billion Credit

Article excerpt

Chemical Bank and Bankers Trust are leading a $1.5 billion refinancing for Jefferson Smurfit Corp. as part of a recapitalization of the highly leveraged papper company.

The bank credit is the largest leveraged deal to hit to loan market in years.

As part of the recapitalization, Jefferson Smurfit also planning public offering of equity and debts, market sources said.

The public offerings have not yet been filed with the Securities and Exchange Commision, and Jefferson Smurfit's chief financial officer, John Funke, did not return a phone call Friday for comment.

Joint Ownership

Based in St Louis, the company is jointly owned by Morgan Stanley Leveraged Equity Fund and Smurfit International of Ireland.

Jefferson Smurfit, in turn, owns Container Corp. of America.

Proceeds from the new bank credit will be used mainly to repay existing loans and other senior debt.

Chemical Bank is the administrative agent for the refinancing, and Bankers Trust is co-arranger. Each committed $250 million to the deal.

About 20 other banks have been asked to commit $100 million apiece. The deadline for commitments is later this month.

The credit will be syndicated in the broader loan market in March, according to banking sources familiar with the deal.

Credit Components

Market sources said the bank credit includses an $850 million "standby" term loan, which would finance a planned repurchas of existing public securities. …

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