Entravision, Sunny Delight break for trading with both deals bid in the par ½ context

By Sara Rosenberg

New York, Aug. 20 - Entravision Communications Corp. and Sunny Delight Beverages Co. allocated and broke for trading Friday, and although both term loans were quoted at respectable plus par levels, some believe that levels should improve even more next week when secondary activity picks up a little.

Entravision's institutional term loan opened around par ¾ bid, 101 offered, backed up by about a quarter of a point to par ½ bid, par ¾ offered and ended the day in the par ½ bid, 101 offered area, according to a trader.

The term loan actively traded on the break and then quieted down by mid-afternoon, the trader said, adding that it's been "hovering up and down."

"They're cleaning up a lot of half million allocations on that one," a second trader said. "Once you clean up those and get more big tickets it wills tart moving up. It backed off because no one will pay a lot for those little half million pieces. [There's] lots of trading but no volume."

The $250 million institutional portion contains a $175 million 71/2-year term loan B with an interest rate of Libor plus 175 basis points and a $75 million delayed-draw term loan B with an interest rate of Libor plus 175 basis points.

Entravision's $400 million senior secured credit facility (B1/B+) also has a $150 million 61/2-year revolver with an interest rate of Libor plus 200 basis points.

Originally, pricing guidance on all tranches was set at Libor plus 200 to 225 basis points and then was lowered to the Libor plus 200 basis points area soon after launch on oversubscription. The term loan B and delayed-draw term loan were then reverse flexed to current pricing because demand was so high.

In fact, Entravision was oversubscribed within a few hours of the July 28 bank meeting as several orders came in pre and post meeting, with some attributing the success to positive investor sentiment towards deals in the broadcasting sector.

Goldman Sachs and Union Bank of California are the lead banks on the deal, with Goldman listed on the left.

Proceeds will be used to refinance outstanding bank borrowings under the company's existing $400 million credit facility, for general corporate purposes and to fund the potential repurchase of the remaining shares of its series A preferred stock.

Entravision is a Santa Monica, Calif., diversified Spanish-language media company.

Sunny Delight par ½ bid

Sunny Delight's first-lien term loan was quoted at par ½ bid, 101 offered on the break around midday and remained pretty much unchanged at those levels throughout market hours, according to a trader.

"I think they had a hard time getting in touch with everyone," the trader said. "There were no real offers but I expect it will move up from there. It should pick up on Monday."

The $170 million first-lien term loan (B1/B+) is priced with an interest rate of Libor plus 425 basis points and contains call protection of 101 in year one.

Sunny Delight's $85 million second-lien term loan (B2/B-), which has an interest rate of Libor plus 750 basis points and call protection of 102 in year one and 101 in year two, was not seen quoted on Friday, the trader added.

The $295 million credit facility also contains a $40 million revolver (B1/B+) with an interest rate of Libor plus 400 basis points and a step down to Libor plus 350 basis points if leverage falls below 2.5x.

Originally, the $170 million first-lien term loan was talked at Libor plus 400 to 450 basis points and the $85 million second-lien term loan was talked at Libor plus 700 to 800 basis points. The revolver was always expected to come 25 basis points inside of the first-lien term loan pricing.

UBS is the lead bank on the deal.

Proceeds will be used to help fund J.W. Childs Associates LP's acquisition of the Cincinnati-based Sunny Delight and Punica juice-based drink businesses from The Procter & Gamble Co.

Pinnacle allocations ahead

Pinnacle Entertainment Inc. is expected to allocate its newly upsized $400 million amended credit facility early in the Aug. 23 week, according to a market source.

On Thursday, the syndicate decided to upsize Pinnacle's term loan to $275 million from $250 million and revolver to $125 million from an initial launch size of $100 million. Through this deal, the revolver is being increased from its current size of $75 million.

Pricing on the term loan remained at Libor plus 300 basis points, the source said. A portion of the term loan is delayed draw for 12 months and contains an unfunded fee of 100 basis points.

Under this amendment, pricing on the revolver will remain in line with existing pricing.

Proceeds from the amended credit facility will be used to reprice and replace the existing term loan, which carries an interest rate of Libor plus 350 basis points, and help fund the increased scope and budget of the company's Lake Charles project.

And, the increased funds from the upsizing will come in handy since the "company has a lot of projects so there'll be a need for the money [and] it was nicely oversubscribed," the source added.

On the day of the July launch, some existing lenders had already placed orders and some even tried to increase their positions, so it's no surprise that the facility ended up being oversubscribed. New lenders were really only approached for the revolver.

Lehman Brothers and Bear Stearns are the lead banks on the deal, with Lehman listed on the left.

Pinnacle is a Las Vegas owner and operator of gaming entertainment facilities.

Blockbuster closes

Blockbuster Inc. closed on its $1.15 billion credit facility (Ba2/BB/BB) Friday, according to a company news release. JPMorgan, Citigroup and Credit Suisse First Boston were the lead banks on the deal, with JPMorgan listed on the left.

The facility consists of a $550 million seven-year term loan B with an interest rate of Libor plus 250 basis points and soft call protection of 101 in year one, a $500 million seven-year revolver with an interest rate of Libor plus 200 basis points and a $100 million seven-year term loan A with an interest rate of Libor plus 200 basis points.

Originally, the term loan B was priced at Libor plus 200 basis points but was flexed higher with the soft call added once the company's $300 million bond offering priced at a wider-than-expected level.

Furthermore, the term loan B was initially sized at $750 million and the term loan A was initially sized at $200 million but both were reduced once the company opted to come to market with the bond offering.

Blockbuster got the new credit facility and issued the bonds to help fund the split off from Viacom Inc. This new facility replaces the company's existing revolver and will be used, along with the bond deal, to pay a special distribution of $5 per share, or about $905 million, to its stockholders and to pay some of the transaction costs related to the special distribution, the split off and credit agreement. The credit facility will also be available for working capital and general corporate purposes.

Blockbuster is a provider of in-home movies and game entertainment.

US Oncology closes

Oiler Acquisition Corp., an entity formed by Welsh, Carson, Anderson & Stowe, completed its acquisition of US Oncology Inc., according to a company news release.

To help fund the acquisition, US Oncology got a new $560 million senior secured credit facility (Ba3/B+), consisting of a $160 million five-year revolver with an interest rate of Libor plus 250 basis points and a $400 million seven-year term loan B with an interest rate of Libor plus 275 basis points.

JPMorgan Chase Bank, Wachovia Bank and Citicorp North America Inc. were the lead banks on the Houston cancer-care services company's deal.

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