Isle of Capri Casinos and Veridian bank meetings Tuesday; both deals expected to perform well

By Sara Rosenberg

New York, April 1 - Primary bank loan market attention Monday was focused on this week's upcoming bank meetings for Isle of Capri Casinos Inc.'s refinancing of its credit facility and Veridian Corp.'s new credit facility. Market professionals expect the new deals to receive a good amount of attention from institutional investors due to various market environmental factors.

Isle of Capri Casinos Inc. (Ba3/BB-) is holding its bank meeting on Tuesday, according to market sources, in the hopes of amending and restating its current $620 million credit facility. CIBC is the lead arranger for the new $500 million credit facility. The credit facility is expected to close by the end of April.

The amended and restated credit facility will consist of a $250 million five-year revolver and a $250 million six-year term B tranche. The revolver has an interest rate that is grid based and can range from Libor plus 150 basis points to Libor plus 275 basis points, according to a syndicate source. There is a commitment fee of 50 basis points on the revolver. The term B loan has an interest rate of Libor plus 275 basis points, the syndicate source said.

According to one market professional, the new offering should be well received. He based his assumption on a general behavior analysis of the current primary bank loan market in which refinancing offerings have been getting a favorable amount of attention from investors. His assumption was proved correct by a syndicate source that stated that the deal is expected to be "well oversubscribed".

"We've received a lot of positive reverse inquiry," the syndicate source said, explaining that current holders have expressed interest in trading in their old paper for new paper. "There's a lot of demand for institutional gaming paper," the source added, "so, we expect to have a lot of tickets."

Also scheduled for Tuesday, is Veridian Corp.'s (Ba3/BB-) bank meeting regarding its new $200 million senior secured credit facility. Wachovia is sole lead and administrative agent for the deal. According to syndicate sources, the credit facility is expected to close during mid-May.

The new credit facility is divided into a $70 million revolver and a $130 million term B tranche. The revolver matures in five years and has an interest rate of Libor plus 275 basis points. The term matures in six years and has an interest rate of Libor plus 350 basis points.

Proceeds from the loan will be used to refinance existing debt, fund working capital needs and for other general corporate purposes.

According to a syndicate source, Veridian's credit facility has received "strong market interest" ahead of its bank meeting.

"The term loan B has gone very well already," the source said. "It's what people want." He went on to explain that a deal like Veridian offers investors a good opportunity because "it's priced well, rated well and is in a desirable sector."

The company is a provider of information-based systems, integrated solutions and services to the U.S. government and is headquartered in Arlington, Va.

In other primary news, it was revealed Monday that Team Health Inc. (Ba3) is expected to obtain a new $300 million credit facility. Fleet National Bank and Bank of America Securities are joint lead arrangers and joint bookrunners for the loan. Fleet National Bank will also act as administrative agent while Bank of America Securities is taking on the role of syndication agent. A bank meeting is scheduled for April 9, according to company and syndicate sources. The credit facility is expected to close before June 30.

The proposed credit facility, according to David Jones, the company's chief financial officer, will consist of a $75 million five-year revolver with an interest rate of Libor plus 275 basis points, a $75 million five-year term loan A with an interest rate Libor plus 275 basis points and a $150 million six-and-a-half-year term loan B with an interest rate of Libor plus 325 basis points. There is a commitment fee of 50 basis points on the revolving credit facility, Jones said. Proceeds will be used to refinance existing bank debt, to fund the acquisition of Spectrum Healthcare Resources and for general corporate purposes.

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