Atkins Nutritionals lowers pricing on first- and second-lien term loans due to strong demand

By Sara Rosenberg

New York, Nov. 17 - Atkins Nutritionals' credit facility, which launched earlier this month, was reverse flexed on both pieces of term loan debt Monday as strong demand allowed the syndicate to request lower rates. In fact, demand was so high that pricing on one tranche was lowered by 75 basis points while pricing on the other tranche was lowered by 25 basis points.

The $78.5 million second-lien term loan was flexed down to Libor plus 575 basis points from Libor plus 650 basis points, and the $215 million first-lien term loan was flexed down to Libor plus 325 basis points from Libor plus 350 basis points, according to a sell-side source.

The $323.5 million credit facility also contains a $30 million five-year revolver with an interest rate of Libor plus 325 basis points, which was left unchanged.

Demand strength was noticeable on this deal from the very start as the first-lien term loan was increased to $215 million from an originally anticipated size of $200 million prior to launching and commitments were reported to be flowing in to the books also before the bank meeting took place.

UBS Investment Bank is the lead arranger on the deal that will be used to back the company's buyout by Parthenon Capital and GS Capital Partners.

Atkins Nutritionals is a Ronkonkoma, N.Y. provider of food, nutritional and information products for controlled carbohydrate lifestyles.

Meanwhile, there have been some early bird commitments received on a few deals that are expected to launch later this week, although specific numbers were not being revealed, according to market sources, including Atrium Cos. Inc.'s and United Agri Products North America's proposed credit facilities.

Atrium is scheduled to launch a $230 million facility on Wednesday consisting of a $50 million five-year revolver expected to price in the Libor plus 300 basis points area and a $180 million five-year term loan B expected to price in the Libor plus 325 basis points area.

CIBC World Markets and UBS Securities are the lead banks on the deal.

Proceeds will be used to help support Kenner & Co.'s buyout of the Dallas window manufacturer in a transaction valued at about $610 million.

United Agri Products North America is also scheduled to launch a deal on Wednesday. The company will bring a $500 million five-year asset based revolver to market priced at Libor plus 275 basis points. GE and UBS Securities are the lead banks on the deal.

Proceeds will be used to help support Apollo Management LP's acquisition of the company from ConAgra Foods Inc. in a management-led buyout. The purchase price for United Agri Products will be about $600 million, subject to adjustments for the final closing balance sheet.

United Agri Products is a Greeley, Colo., developer and distributor of crop production products and services to growers.

In follow-up news, CKE Restaurants Inc. closed on its $175 million senior secured credit facility (B1/B). BNP Paribas is the lead arranger and administrative agent for the credit facility.

The Santa Barbara, Calif., restaurant operator's facility consists of a $150 million three-year revolver and a $25 million 41/2-year term loan.

Originally the deal was expected to consist of a $125 million revolver and a $25 million term loan, but the revolver was upsized by $25 million during syndication.

Proceeds from the term loan will be used to fund the repayment of the remaining portion of the company's 4.25% convertible notes at their maturity on March 15.

Proceeds from the revolver will be used to provide liquidity for general working capital purposes. The tranche also includes an $80 million letter of credit sub-facility to support the company's casualty insurance programs.

"The restructuring of our credit facility allows us to fully address our upcoming convertible debt maturity and gives us additional liquidity to fund our business. This is an important milestone for the company that will allow our management team to remain focused on improving the performance of each of our brands and our overall financial picture," said Ted Abajian, executive vice president and chief financial officer, in a company news release.

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