Metris $175 million term loan to launch Tuesday

By Sara Rosenberg

New York, April 19 - Metris Cos. Inc. is scheduled to launch a $175 million term loan on Tuesday, according to a market source. Goldman Sachs is the lead bank on the deal.

The term loan is priced at 11% and is being issued with an original issue discount at 99, the source said.

Proceeds will be used to refinance the company's $125 million one-year term loan that was obtained last June and is priced with an annual interest rate of 12% plus performance payments based on the excess spread in the Metris Master Trust.

The increase in size of the proposed term loan from the existing one is for "extra uses of proceeds," the source added.

On Monday, the company revealed that that it is considering a private placement of approximately $250 million of senior secured notes. Proceeds from the notes would be used to refinance existing debt, including term loan debt, the 10% senior notes due in 2004 and a portion of the 10 1/8% senior notes due in 2006, according to a company news release.

Metris is a Minnetonka, Minn., provider of financial products and services.

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