Evergreen, United Subcontractors tweak deals; Dollar, Nusil set talk; Cinemark, Insight, Ace break

By Sara Rosenberg

New York, Oct. 4 - Evergreen International Aviation, Inc. made some more changes to its credit facility, including increasing pricing on the first- and second-lien debt and modifying original issue discounts.

In other primary news, United Subcontractors Inc. downsized its credit facility, increased pricing on its first- and second-lien tranches, added original issue discounts, changed call premiums and sweetened some first-lien terms.

Also in the primary, Dollar Financial Corp. and Nusil Technology came out with price talk on their credit facilities as both deals were launched with bank meetings on Wednesday.

In secondary happenings, Cinemark USA Inc.'s, Insight Midwest's and Ace Cash Express Inc.'s credit facilities freed for trading, with all three companies' institutional term loans quoted atop par.

Evergreen International Aviation came out with some new changes on its credit facility, this time increasing first- and second-lien spreads and sweetening original issue discounts, according to a market source.

The $240 million five-year first-lien term B (B1/B+) is now priced with an interest rate of Libor plus 350 basis points, up from the most recent talk of Libor plus 325 bps and original talk at launch of Libor plus 275 bps, the source said.

In addition, the term loan B is now being offered to investors with an original issue discount of 99 as opposed to the previously proposed discount of 99½ that had been added earlier on in the syndication process.

As for the $100 million 61/2-year second-lien term loan (Caa1/CCC+), that is now priced with an interest rate of Libor plus 750 bps plus 150 bps pay in kind, up from original talk at launch of just Libor plus 750 bps, the source continued.

Furthermore, this second-lien tranche is now being offered to investors with an original issue discount of 98 as opposed to having no original discount at all.

Second-lien call premiums are 103 in year one, 102 in year two and 101 in year three. The call protection was changed from 102 in year one and 101 in year two earlier in the syndication process.

Lastly, under these new changes, pricing on the company's $30 million five-year revolver (B1/B+) was flexed up to Libor plus 350 bps from most recent talk of Libor plus 325 bps and original talk at launch of Libor plus 275 bps, the source remarked.

When the deal first launched in late July, tranche sizes included a $50 million revolver, $300 million first-lien term loan B and $50 million second-lien term loan. In early August, the first-lien term loan B was downsized to $250 million while the second-lien term loan was upsized to $100 million, and then in September, the revolver was downsized to $30 million from $50 million, and the first-lien term loan B was downsized to $240 million from $250 million.

The newly revised credit facility terms are the final terms of the deal as syndication is "done at those levels," the source added.

Closing on the transaction is expected to occur next week.

Credit Suisse is the lead bank on the deal that will be used to fund a tender offer for any and all of the company's outstanding 12% senior second secured notes due 2010.

Evergreen is a McMinnville, Ore.-based portfolio of five diverse aviation companies.

United Subcontractors reworks loan

United Subcontractors made a round of changes to its credit facility, including reducing term loan sizes, increasing pricing, adding discounts, revising call premiums and changing first-lien amortization and cash flow sweep requirements, according to a fund manager.

With the modifications, the first-lien term loan (B2/B) is now sized at $275 million, down from an original size of $300 million, pricing was increased to Libor plus 350 bps from original talk of Libor plus 275 to 300 bps and the paper is now being offered at an original issue discount of 99, the fund manager said.

In addition, the first-lien term loan now carries hard call protection of 102 in year one and 101 in year two, as opposed to no call protection as was originally proposed.

Furthermore, amortization on the first-lien term loan was sweetened to 5% per year and the cash flow sweep was beefed up to 100%, the fund manager continued.

Moving on to the $15 million synthetic letter-of-credit facility (B2/B), that too saw an increase in pricing to Libor plus 350 bps from original talk at launch of Libor plus 275 bps to 300 bps, the addition of an original issue discount of 99 and the addition of hard call protection of 102 in year one and 101 in year two.

Meanwhile, the second-lien term loan (Caa1/CCC+) was downsized to $175 million from an original size of $200 million, pricing was increased to Libor plus 900 bps from original talk at launch of Libor plus 750 to 800 bps and the paper is now being offered at an original issue discount of 99, the fund manager said.

Call premiums on the second-lien term loan were made more attractive to investors as they were changed to non-callable for two years, then at 104 in year three, at 102 in year four and par thereafter, the fund manager added.

The company's now $500 million credit facility also includes a $35 million revolver (B2/B) that is priced with an interest rate of Libor plus 275 bps, in line with original talk.

Proceeds from the credit facility will be used to fund a dividend payment to Wind Point Partners and to refinance existing debt. With the term loan downsizings, the dividend payment was reduced by $50 million to $75 million.

The fact that changes were made to the deal was not much of a surprise as investors have been saying since launch that price talk was too low given the industry the company is in and its dependence on home building.

Speculation since last week was close to true, although not quite there, as rumors were that the syndicate might shrink the second-lien term loan tranche and possibly replace those funds with some other form of junior capital, increase spreads on everything and potentially add original issue discounts.

Goldman Sachs is the lead bank on the deal.

United Subcontractors is a Salt Lake City-based installer of residential and commercial insulation systems and provider of related products and services.

Dollar spread guidance

Dollar Financial released price talk of Libor plus 275 to 300 bps on all tranches under its proposed $475 million credit facility (B3/BB-) as the transaction was presented to lenders with a bank meeting on Wednesday, according to a market source.

Tranching on the facility, which is being sold to U.S. investors, is comprised of a $75 million five-year U.S. revolver, a $25 million five-year Canadian revolver, a $295 million six-year Canadian first-lien term loan and an $80 million six-year UK first-lien term loan.

Credit Suisse and Wells Fargo are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help fund a tender offer for any and all of the company's $200 million 9¾% senior notes due 2011 and to refinance existing debt. The tender offer expires at 5 p.m. ET on Oct. 12.

Dollar Financial is a Berwyn, Pa., franchisor of check-cashing stores.

Nusil price talk

Nusil Technology announced opening talk of Libor plus 275 bps on both its $125 million term loan B and its $10 million revolver as this deal was also launched into syndication during Wednesday's market hours, according to a source.

RBS Securities is the lead bank on the $135 million credit facility that will be used to refinance existing debt and fund a small dividend to existing shareholders.

Nusil is a Carpinteria, Calif., silicone compounds manufacturer.

Exco downsizes

Exco Resources Inc. reduced the size of its five-year second-lien term loan to $650 million from $750 million as the company has enough cash to compensate for the lost funds, according to a market source.

The second-lien loan is being talked at Libor plus 600 bps, after flexing up from the most recent talk of Libor plus 500 to 550 bps and original talk of Libor plus 450 bps.

In addition, early on in the syndication process, two covenants were added to the deal - a cash flow sweep and a capital expenditures requirement.

Exco's now $1.4 billion senior secured credit facility also includes a $750 million four-year revolver with pricing ranging from Libor plus 100 to 175 basis points based on utilization. Initial pricing on the revolver will be Libor plus 175 basis points.

The revolver was already launched to senior managing agents in late July.

JPMorgan and Credit Suisse are leading the second-lien term loan, with JPMorgan the left lead. JPMorgan is the lead bank on the revolver. Goldman Sachs and Bear Stearns are co-managers.

The credit facility is being borrowed by a wholly owned unrestricted subsidiary of Exco to fund the acquisition of Winchester Energy Co. Ltd. from Progress Energy, Inc. for $1.2 billion in cash, subject to purchase price adjustments. The debt will be non-recourse to Exco Resources.

Exco's existing amended and restated revolving credit facility will remain in place following this transaction.

Exco is Dallas-based independent energy company.

Cinemark frees to trade

Switching to the secondary, Cinemark's credit facility broke for trading, with the $1.12 billion term loan quoted at par ½ bid, par ¾ offered on the open, getting as high as par ¾ bid, par 7/8 offered and then settling in at par 5/8 bid, par 7/8 offered, where it closed the day, according to traders.

The term loan is priced at Libor plus 200 bps with a step down to Libor plus 175 bps at Ba3/BB- corporate ratings. During syndication pricing on the term loan was reverse flexed from original talk of Libor plus 225 bps with the addition of the step due to strong demand.

Cinemark's $1.27 billion senior credit facility (Ba2/B) also includes a $150 million revolver priced at Libor plus 200 bps. The revolver pricing was also cut from original talk of Libor plus 225 bps during syndication.

Proceeds from the term loan will be used to fund the acquisition of Century Theatres, Inc. and to refinance existing credit facility debt. The equity purchase price for Century is about $681 million. The bank debt to be refinanced includes Cinemark's current senior facility of $254 million and Century's senior facility of $360 million.

The revolver is expected to be undrawn at closing.

Lehman Brothers and Morgan Stanley are the lead banks on the credit facility.

The transaction will not constitute a change of control for purposes of Cinemark's 9¾% senior discount notes or its 9% senior subordinated notes.

Cinemark is a Plano, Texas, motion picture exhibitor. Century is a San Rafael, Calif., motion picture exhibitor.

Insight Midwest breaks

Also freeing for trading on Wednesday was Insight Midwest's credit facility, with the $1.8 billion term loan B quoted at par ½ bid, par ¾ offered on the open and then moving up to par 5/8 bid, par 7/8 offered where it closed the day, according to a trader.

The term loan B is priced at Libor plus 225 bps. During syndication, the tranche was upsized from $1.725 billion and pricing was flexed up from original talk at launch of Libor plus 200 bps.

Insight Midwest's $2.445 billion credit facility (Ba3/BB-/BB+) also includes a $385 million term loan A, which was downsized from $500 million during syndication, and a $260 million revolver, which was downsized from $350 million during syndication.

Bank of America and JPMorgan are the lead banks on the deal that will be used to refinance existing debt, including the company's 10½% senior notes due Nov. 1, 2010 and a portion of its 9¾% senior notes due Oct. 1, 2009.

Insight Midwest is a subsidiary of Insight Communications Co. Inc., a New York-based cable television system operator.

Ace seen atop par

Ace Cash Express' credit facility hit the secondary on Wednesday as well, with the $125 million covenant-light seven-year term loan B (B3/B+) quoted at par 3/8 bid, par ¾ offered, according to a trader.

The term loan is priced at Libor plus 300 bps, the low end of original guidance of Libor plus 300 to 325 bps.

Ace's $400 million credit facility also includes a $275 million five-year asset-based revolver with an interest rate of Libor plus 150 bps.

Of the total revolver amount, $50 million is seasonal and will be available from January through March.

Bear Stearns is the bookrunner and administrative agent on the term loan. General Electric Capital Corp. is the bookrunner and administrative agent on the revolver.

Proceeds will be used to help fund the leveraged buyout of Ace by JLL Partners Fund V, LP for $30 per share in cash.

Other LBO financing will come from $175 million of 10¼% eight-year senior notes and $178.8 million of equity.

Closing and funding of the credit facility is expected to take place on Thursday.

ACE is an Irving, Texas, retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services.

Transeastern falls

Transeastern's term loan started to slide again on Wednesday, with levels dropping to 67½ bid, 69 offered, according to a fund manager. By comparison, on Tuesday the fund manager had the loan quoted at 69 bid, 73 offered and a trader had the loan quoted at 70 bid, 71 offered.

All last week, the bank debt had been tumbling, dropping from trading levels around the 98/99 context to as low as 66 bid, 68 offered this past Friday on worries over the company's financials and the weak Florida housing market.

Transeastern, a joint venture between Technical Olympic USA, Inc. and Falcone Group, announced last week that it cannot support its existing capital structure and that it is exploring various options to fix the liquidity problem, including requesting waivers from its lenders regarding potential defaults and permitting future advances under the revolver, and restructuring land bank obligations.

Technical Olympic is a Hollywood, Fla.-based builder and seller of single family homes.

ValleyCrest closes

ValleyCrest Cos. closed on its $345 million credit facility consisting of a $235 million seven-year first-lien term loan at Libor plus 250 bps, a $60 million six-year revolver at Libor plus 250 bps and a $50 million 71/2-year second-lien term loan at Libor plus 550 bps, according to a market source.

Call premiums on the second-lien term loan are 102 in year one and 101 in year two.

Goldman Sachs and UBS acted as joint bookrunners on the deal that is being used to help fund the leveraged buyout of ValleyCrest by MSD Capital.

ValleyCrest is a Calabasas, Calif., provider of landscape services.

California Check Cashing closes

Golden Gate Capital completed its acquisition of California Check Cashing Stores, according to a news release.

To help fund the transaction, California Check Cashing got a new $90 million credit facility consisting of a $10 million six-year revolver at Libor plus 350 bps, a $65 million six-year first-lien term loan at Libor plus 350 bps and a $15 million seven-year second-lien term loan at Libor plus 725 bps.

During syndication, the first-lien term loan was upsized from $60 million and the amount of funding that was needed under the revolver was decreased.

UBS acted as the lead bank on the deal.

California Check Cashing is an Oakland, Calif., retailer of alternative financial services.

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