Coinstar, MedCath, Pierre Foods institutional loans all break at plus 101 levels

By Sara Rosenberg

New York, June 29 - New paper headed into the secondary loan market on Tuesday with institutional term loans from Coinstar Inc., MedCath Corp. and Pierre Foods Inc. all breaking in the plus 101 context.

Coinstar's $250 million term loan B was bid at 101½ and offered at 101¾ when it was first freed to trade and then it continued to strengthen to 101 5/8 bid, 101 7/8 offered throughout the day, according to a market source.

Pricing on the tranche, which was originally issued to investors at par, is Libor plus 225 basis points. Initially, the tranche was talked at Libor plus 250 to 275 basis points but was reverse flexed during syndication as something like $1 billion in commitments flooded into the book.

"Allocations were small. Single digits for most people I think," the source added.

Coinstar's $300 million credit facility (Ba3/BB-) also contains a $50 million revolver.

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

Proceeds will be used to finance the $235 million cash purchase of American Coin Merchandising Inc.

As part of the acquisition, Coinstar will not be assuming any of American Coin's existing debt. The transaction is expected to close in the third quarter of this year. Closing is contingent upon customary conditions including obtaining Hart-Scott-Rodino and other governmental approvals, securing contractual consents and financing.

Coinstar is a Bellevue, Wash., owner and operator of automated self-service coin-counting machines. American Coin is a Louisville, Colo., owner and operator of coin-operated amusement vending equipment.

MedCath mid-to-upper 101s

MedCath's $100 million five-year term loan B was quoted in the mid-to-upper 101s late in the day, according to a trader.

The tranche is priced with an interest rate of Libor plus 300 basis points after reverse flexing from original pricing of Libor plus 350 basis points during syndication.

MedCath's $200 million credit facility (B2/B+) also contains a $100 million five-year revolver with an interest rate of Libor plus 300 basis points.

Wachovia and Bank of America are the lead banks on the Charlotte, N.C., healthcare provider's deal that will be used to refinance existing debt.

Pierre Foods 101¼ to 5/8

Pierre Foods Inc.'s $150 million six-year term loan B was trading at 101¼ bid, 101 5/8 offered by late day, according to a trader.

The tranche is priced with an interest rate of Libor plus 250 basis points after being reverse flexed from initial pricing of Libor plus 275 basis points during syndication, the trader added.

The $190 million credit facility (B1/B+) also contains a $40 million five-year revolver.

Bank of America and Wachovia are the lead banks on the deal.

Proceeds will be used to help fund the acquisition of Pierre Foods by an affiliate of Madison Dearborn Capital Partners. The sale is scheduled to close on or around June 30.

Pierre Foods is a Cincinnati producer of cooked beef, pork, chicken, turkey and bakery products for school, foodservice, vending and convenience store markets.

Ardent Health cuts pricing

Ardent Health Services LLC's $275 million term loan B (B1/B+) was reverse flexed first thing Tuesday morning to Libor plus 225 basis points from Libor plus 250 basis points on strong demand, according to a market source.

"It's already oversubscribed on the recommitments," the source added.

Citigroup and Bank of America are the lead banks on the deal, with Citi listed on the left.

Proceeds will be used for acquisition financing.

On May 11, the company announced plans to acquire Hillcrest HealthCare System for $281.2 million plus working capital that is expected to range from $40 million to $60 million. The company expects to close the transaction during the third quarter of 2004, subject to regulatory approvals and other customary conditions.

Ardent is a Nashville, Tenn., provider of healthcare services.

Revlon ups size, prices at low end

Revlon Consumers Products Corp. priced its term loan at the low end of talk, modified the call protection and increased the size in response to overwhelming demand that led to oversubscription of the tranche almost immediately after launching last week.

The six-year term loan (B3/B-) is now sized at $800 million, compared to initial sizing of $750 million, is priced with an interest rate of Libor plus 600 basis points, compared to initial price talk of Libor plus 600 to 625 basis points, and contains call protection of 105 in year one, 103 in year two and 101 in year three, compared to original call protection of 105 in year one, 103 in year two, 102 in year three and 101 in year four, according to a fund manager.

Everybody had to recommit to the deal once these changes were made late in the day Monday, and, in fact, not a single investor was reported to have dropped out of the deal, the fund manager said.

"They're hoping to close next Friday so allocations may take place Thursday or Friday of this week," the fund manager added.

The $160 million five-year asset-based revolving credit facility was left unchanged in size and pricing with an interest rate of Libor plus 250 basis points and an undrawn commitment fee of 50 basis points.

The extra $50 million that the company is getting with the increased term loan is basically just extra liquidity, the fund manager explained.

There is only one financial covenant under the term loan and that is a maximum senior secured leverage test which is set at 51/2x at December 2004 and gradually reduces to 41/2x at the beginning of the first quarter of 2007.

On a March 2004 last-12-month basis, total debt to EBIDTA is about 7.8x.

Proceeds will be used to refinance the existing credit facility that currently has about $290 million outstanding, to refinance the approximately $363 million 12% senior secured notes and to pay about $95 million in transactional fees and expenses, tender costs and accrued interest.

Citigroup is the lead bank on the proposed credit facility.

Revlon is a New York manufacturer and seller of cosmetics and skin care, fragrance and personal care products.

Allied Security gets tickets

Allied Security Inc.'s $260 million credit facility (B2/B+) had "got some tickets in on both tranches" by the end of the day after launching to investors Tuesday morning, according to a market source.

Bear Stearns is the lead bank on the deal that consists of a $50 million five-year revolver with an interest rate of Libor plus 450 basis points and a $210 million six-year term loan B.

Pricing on the term loan B is still to be determined, the source said.

For the revolver, a $10 million commitment gets an upfront fee of 75 basis points.

Proceeds will be used by the King of Prussia, Pa., private security company to help fund the acquisition of Barton Protective Services and repay debt.

Belden & Blake resets deadline

Belden & Blake Corp. moved up the commitment deadline for its recently launched $170 million credit facility (B2/BB-) to Wednesday from the original deadline of July 13 due to the strong demand that the deal has received, according to a market source.

In fact, the deal was described as "way oversubscribed" within a few hours of launching on Friday as investors continued to show their support for the transaction and its low first-lien leverage multiple of 1½ times.

The $30 million revolver is talked at Libor plus 275 basis points, the $40 million letter-of-credit facility is talked at Libor plus 275 basis points and the $100 million term loan is talked at Libor 275 to 300 basis points.

Goldman Sachs is the sole lead bank on the deal.

Proceeds, combined with proceeds from a $192.5 million senior secured notes offering that kicked off via a roadshow on Thursday, will be used to help fund Belden's merger with an affiliate of Carlyle/Riverstone Global Energy & Power Fund II LP.

Carlyle/Riverstone, through its new partnership with Capital C Energy LLC, entered into a cash merger agreement to acquire all of the outstanding stock of Belden & Blake.

As part of the merger, Belden & Blake began a tender offer and consent solicitation to purchase for cash any and all of its outstanding $225 million 9 7/8% senior subordinated notes due 2007.

The tender offer, which is subject to, among other things, closing of the merger and funding, expires on July 15.

Belden & Blake is a Canton, Ohio, oil and gas producer. Capital C is a Houston-based company that seeks to accumulate a portfolio of domestic oil and gas assets.

PlayPower amendment passes

Now that PlayPower Inc.'s amendment and restatement passed on Monday, the syndicate is gearing up to allocate the deal, with the hope being that it may allocate as early as later this week, according to a market source.

The company was basically asking lenders to reprice its approximately $125 million of term loan debt at Libor plus 450 basis points, up from existing pricing of Libor plus 425 basis points, and increase the term loan by $35 million, with the add-on also priced at the Libor plus 450 basis points level.

Furthermore, the company was looking to reprice its $25 million revolver at Libor plus 400 basis points, up from Libor plus 375 basis points.

UBS Warburg and The Royal Bank of Scotland are joint lead arrangers on the deal, with UBS listed on the left.

The $35 million add-on, which was only launched to existing investors since it is relatively small, will be used to fund the acquisition of The Little Tikes Co., a Hudson, Ohio, manufacturer and marketer of children's products, from Newell Rubbermaid Inc.

PlayPower is a St. Louis commercial play and recreation equipment manufacturer.

Horizon Lines commitments due

Commitments were due on Horizon Lines LLC's $275 million "way oversubscribed" credit facility on Tuesday, with allocations expected to take place as early as mid-next week, according to a market source.

Although the deal has done so well in syndication, there have been no changes to pricing as the syndicate is waiting to see what happens with the $250 million bond deal that is in the roadshow stage until Wednesday and is pricing Thursday. But, the expectation is that pricing will remain as is, the source explained.

Some of the deal's success could be attributed to existing lenders as some had already signed up to rollover their commitments and potentially upsize their positions on the day of launch.

The facility, which launched on June 17, consists of a $250 million seven-year term loan with an interest rate of Libor plus 300 basis points and a $25 million five-year revolver that went out with pricing of Libor plus 250 basis points. Prior to launch, market sources had placed the revolver price talk at Libor plus 275 basis points.

UBS and Goldman Sachs are joint lead arrangers on the credit facility, with UBS listed on the left. ABN Amro is the documentation agent.

Following the transactions, total leverage will be 5x and senior leverage will 2.5x.

Proceeds from the debt transactions will be used to help fund Castle Harlan Inc.'s previously announced acquisition of Horizon Lines from The Carlyle Group for $650 million. Castle Harlan Partners IV LP, an investment fund totaling $1.163 billion in commitments that closed last September, is the actual buyer of Horizon Lines.

Horizon Lines is a Charlotte, N.C., container shipping company.

Hollywood Entertainment timing

Although some expect Hollywood Entertainment Corp.'s proposed $475 million credit facility to be fall business because of a long regulatory approval process, the syndicate is still aiming to launch the deal sometime in July, a source close to the deal told Prospect News Tuesday.

UBS AG is the lead bank on the deal that will be used in combination with $600 million of high-yield notes to support a merger with an affiliate of Leonard Green & Partners LP.

The credit facility consists of a $400 million six-year term loan and a $75 million five-year revolver with a 50 basis points commitment fee. If the facility is rated B1/B+ or higher then the two tranches will carry an initial interest rate of Libor plus 300 basis points. If the deal is rated below B1/B+, then the tranches will bear interest at Libor plus 350 basis points. Pricing on the revolver can range from Libor plus 250 to 300 basis points depending on leverage assuming the B1/B+ rating and Libor plus 300 to 350 basis points assuming the lower than B1/B+ rating.

To back up the bond offering, the company has received a commitment for $600 million in bridge financing from UBS, consisting of a $400 million senior unsecured bridge loan and a $200 million senior subordinated unsecured bridge loan, both with a term of one year and both bearing interest at the greater of 10.2% or Libor plus 925 basis points.

Equity financing necessary for the transaction has been fully committed by Leonard Green & Partners LP through Green Equity Investors IV LP.

Under the terms of the merger agreement, Hollywood's shareholders will receive $14.00 per share in cash. The company agreed to the merger following the unanimous recommendation by a special committee comprised of the independent directors of the company's board of directors.

Closing of the merger is anticipated to take place in the third calendar quarter of 2004.

Hollywood Entertainment is a Wilsonville, Ore., video chain.

Riverside & Rocky Mountain closes

Riverside & Rocky Mountain Project Funding closed on its $661.5 million seven-year term loan (Ba3/BB-) due 2011 that is priced with an interest rate of Libor plus 425 basis points and was originally issued to investors at 991/2.

Credit Suisse First Boston is the sole lead arranger and bookrunner on the deal.

Originally the term loan was sized at $665 million but was later downsized to $661.5 million during syndication.

The loan is secured by the power plants. None of the debt is guaranteed by Calpine.

Proceeds were used to pay final construction costs and refinance amounts outstanding under the $250 million non-recourse project financing for the Rocky Mountain facility in Weld County, Colo., and the $230 million non-recourse project financing for the Riverside facility in Beloit, Wis.

In addition, $160 million was used to reimburse Calpine for costs incurred in connection with the development and construction of the Rocky Mountain and Riverside facilities. This will be used for general corporate purposes. The company also received $79 million in cash and letters of credit due to the elimination of certain reserves and letters of credit associated with the original non-recourse project financings.

"Calpine again executes its proven strategy of refinancing commercial bank-issued construction facilities with attractive, long-term capital markets transactions," said Brian Harenza, vice president, finance, in a company news release.

Calpine is a San Jose, Calif., power company.

Jarden closes

Jarden Corp. completed its acquisition of United States Playing Card Co. Under the terms of the securities purchase and related agreements, this closing results in Jarden owning about 75% of USPC with the remaining 25% subject to a put/call agreement starting in the fourth quarter of 2004, according to a company news release.

To help fund the acquisition, Jarden obtained a $100 million term B add-on (Ba3/B+).

CIBC acted as administrative agent and Citigroup acted as syndication agent on the deal.

"The acquisition of USPC exemplifies our ability to identify and obtain industry leading businesses with strong brands in niche consumer product markets. This acquisition is also noteworthy since, in addition to further diversifying our portfolio of brands, we are also extending our global reach through USPC's established European distribution channel," said Martin E. Franklin, chairman and chief executive officer, in the release.

Jarden is a Rye, N.Y., provider of niche, branded consumer products.

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