Eagle Rock, Avago, Bolthouse Farms break for trading; Commonwealth cuts spread

By Sara Rosenberg

New York, Dec. 1 - Eagle Rock Energy, Avago and Bolthouse Farms all freed for trading on Thursday, with Eagle Rock and Avago quoted in the pars and Bolthouse quoted in the 101's for its first-lien term loan and in the 102's for its second lien.

On the primary side of things, Commonwealth Brands Inc. reverse flexed pricing on its term loan B on Thursday, bringing the spread down by 25 basis points.

Eagle Rock Energy allocated and freed for trading during market hours, with the $400 million seven-year term loan quoted in the par ¼ bid, par ½ offered context steadily throughout the session, according to a trader.

The term loan is priced with an interest rate of Libor plus 250 basis points - in line with initial price talk.

The $475 million credit facility also contains a $35 million five-year revolver and $40 million seven-year pre-funded letter-of-credit facility, with both these tranches priced at Libor plus 250 basis points as well.

Goldman Sachs acted as the lead bank on the deal that was used to help fund the acquisition of certain natural gas gathering and processing assets in Texas from Oneok Inc., which was completed Thursday.

Eagle Rock Energy, a portfolio company of Natural Gas Partners, is a Houston-based owner of natural gas gathering and processing assets throughout Texas.

Avago trades atop par

Avago Technologies Finance Pte. Ltd.'s credit facility broke for trading as well, with the $475 million funded seven-year term loan B quoted at par 3/8 bid, par 7/8 offered and the $250 million delayed-draw term loan B quoted at par bid, par ½ offered, according to a trader.

"They traded in the same context pretty much throughout the day," the trader added.

Both the funded and the delayed-draw term loan B's are priced with an interest rate of Libor plus 250 basis points. The delayed-draw term loan B is available until April 2006, with a final seven-year maturity, and contains a 100 basis point undrawn fee.

The $975 million credit facility (B1) also contains a $250 million six-year revolver with an interest rate of Libor plus 250 basis points.

Citigroup and Lehman are the lead banks on the credit facility, with Citi the left lead.

Proceeds from the revolver, funded term loan B, notes, and equity will be used to fund the acquisition of Agilent Semiconductor Products Group by Kohlberg Kravis Roberts & Co. and Silver Lake Partners from Agilent Technologies Inc. for $2.66 billion.

Proceeds from the delayed-draw term loan B will be distributed to the equity holders based on certain conditions, so it's possible that the full $250 million may not end up being fully drawn upon.

The semiconductor company does plan on doing some deleveraging rather quickly. After the LBO is completed, Agilent Semiconductor will sell its storage semiconductor business to PMC-Sierra Inc. for about $425 million cash. Most of the proceeds from the sale of this business will be used to repay debt under the new term loan B.

Bolthouse breaks

Also freeing for trading on Thursday was Bolthouse Farms' credit facility, with the $500 million seven-year term loan B (B2/B+) quoted at 101½ bid, 101¾ offered and the $150 million eight-year second-lien term loan (B3/B-) quoted at 102 bid, 102½ offered, according to a trader.

The first-lien term loan B ended up pricing at Libor plus 250 basis points, right in the middle of original price talk of Libor plus 225 to 275 basis points, and the second-lien term loan ended up pricing at Libor plus 550 basis points.

The second-lien term loan contains call protection of 102 in year one and 101 in year two.

Bolthouse Farms' $725 million credit facility also contains a $75 million six-year revolver (B2/B+) that is priced with an interest rate of Libor plus 250 basis points.

Bank of America, Goldman Sachs and Credit Suisse First Boston are the lead banks on the deal that will be used to help fund the leveraged buyout of the company by Madison Dearborn Partners LLC.

Bolthouse is a San Joaquin Valley, Calif., farmer and distributor of fresh produce.

Calpine rise continues

Calpine Corp.'s second-lien bank debt continued to move higher during Thursday's session as investors are still mulling over valuations based on the assumption that the rumored bankruptcy filing may actually occur.

The San Jose, Calif., power company's second-lien debt was quoted at 78, 80 offered, up from Wednesday's levels of 77 bid, 78 offered.

In fact, Calpine's second-lien has spent every day this week grinding higher - gaining about a point on Monday, about half a point on Tuesday, about a point and a half on Wednesday and then came Thursday's approximately 1 point gain.

Bankruptcy talk began to circulate around the market on Tuesday after the company announced that Peter Cartwright, chairman, president and chief executive officer, and Robert D. Kelly, executive vice president and chief financial officer, were leaving the company.

Calpine lead director Kenneth T. Derr has been named chairman and acting chief executive officer, and Eric N. Pryor, executive vice president and deputy chief financial officer, will serve as interim chief financial officer.

Commonwealth reverse flexes

Commonwealth Brands reduced pricing on its $600 million term loan B to Libor plus 225 basis points from initial price talk at launch of Libor plus 250 basis points on Thursday, according to a market source.

Deutsche Bank and Lehman Brothers are the lead banks on the credit facility, with Deutsche the left lead.

The $620 million credit facility also contains a $20 million revolver.

Proceeds from the facility will be used to help fund the refinancing of all the company's existing debt, which includes outstanding bank and bond debt.

The refinancing is expected to be completed by year-end.

Commonwealth Brands is a Bowling Green, Ky., cigarette manufacturer.

Capella closes

Capella Healthcare Inc. completed its acquisition of four hospitals from HCA Inc. - two in Tennessee and one each in Washington and Oklahoma.

To help fund this acquisition, Capella got a new $195 million credit facility consisting of a $107 million first-lien term loan B (B3/B) with an interest rate of Libor plus 300 basis points, a $48 million second-lien term loan C (Caa2/CCC+) with an interest rate of Libor plus 600 basis points and a $40 million revolver (B3/B).

During syndication, the first-lien term loan B was upsized from $97 million and reverse flexed from Libor plus 325 basis points, and the second-lien term loan was downsized from $58 million.

Citigroup and Bank of America acted as the lead banks on the deal, with Citi the left lead.

Brentwood, Tenn.-based Capella was formed earlier this year by GTCR Golder Rauner LLC, Daniel Slipkovich and Thomas Anderson for the purpose of acquiring and building acute care hospitals within the U.S. Slipkovich is chief executive officer of the company and Anderson is president.

Clean Harbors closes

Clean Harbors Inc. closed on its $120 million five-year amended and restated credit facility (Ba3/BB+) consisting of a $70 million asset-based revolver with an interest rate of Libor plus 150 basis points and a $50 million synthetic letter-of-credit facility at an annual rate of 3.10%.

The interest rate on the synthetic letter-of-credit facility will decrease to 2.85% if the company successfully completes its proposed public offering of common shares and the redemption of $52.5 million of its outstanding 11.25% senior secured notes due 2012, according to a company news release.

The new facility replaces the company's existing $30 million revolver and $90 million synthetic letter-of-credit facility, both of which would have matured in 2009.

Credit Suisse First Boston and Bank of America acted as the lead banks on the deal.

"This new credit agreement significantly lowers our cost of capital and provides Clean Harbors with greater financial flexibility," said James M. Rutledge, executive vice president and chief financial officer, in the release. "We expect this amendment will generate $2.6 million in annual savings for Clean Harbors, which can be used to pay down our debt and support our growth strategy. We also expect to benefit from a reduction in annual non-cash amortization of deferred financing fees of approximately $300,000."

Clean Harbors is a Braintree, Mass., provider of hazardous waste management services.

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