Concord Re trims term loan pricing; Hanesbrands frees to trade

By Sara Rosenberg

New York, Aug. 23 - Concord Re reverse flexed pricing on its term loan B by 25 basis points as the deal was well oversubscribed.

And, Hanesbrands Inc.'s credit facility hit the secondary on Wednesday, with the term loan A trading in the low-pars, the term loan B trading in the high-pars and the second-lien term loan trading in the high-101's.

Concord Re lowered pricing on its $375 million term loan B (Ba2/BB+) to Libor plus 425 basis points from original talk at launch of Libor plus 450 basis points due to strong market demand, according to a source.

Allocations on the loan are expected to go out on Thursday, the source added.

Goldman Sachs is the lead bank on the deal that will be used to serve as collateral for the ability to underwrite insurance business.

This transaction is an insurance deal for Lexington Property Division of AIG.

Concord is a single purpose dedicated insurance vehicle designed for participating in commercial property insurance business for AIG. It has a diversified book of insurance business which includes energy, manufacturing, general property, real estate, communications, inland marine and construction services.

JC Flowers is the sponsor on the deal, providing $375 million of equity.

Hanesbrands breaks

Switching to the secondary, Hanesbrands' credit facility freed for trading early in the session on Wednesday.

The $250 million six-year term loan A (Ba2/BB-) opened up at par bid, par ¼ offered and pretty much stayed in that context with trades going off around par 1/8, according to a fund manager.

The $1.4 billion seven-year term loan B (Ba2/BB-) opened up at par ½ bid, par ¾ offered and then moved up to around par ¾ bid, 101 1/8 offered, with trades going off at par 7/8, the fund manager continued.

Lastly, the $450 million 71/2-year second-lien term loan (Ba3/B-) opened up at 101½ bid, 101¾ offered and then moved up to 101¾ bid, 102 offered, with trades going off at 101 7/8, the fund manager added.

The term loan A is priced at Libor plus 175 basis points, the term loan B is priced at Libor plus 225 basis points and the second-lien term loan is priced at Libor plus 375 basis points.

During syndication, the term loan A was downsized from $350 million while the term loan B was upsized from $1.3 billion, and pricing on the term loan B was flexed up from original talk at launch of Libor plus 200 basis points.

The second-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three.

Hanesbrands' $2.6 billion senior secured credit facility also contains a $500 million five-year revolver (Ba2/BB-) with an interest rate of Libor plus 175 basis points.

Merrill Lynch and Morgan Stanley are joint lead arrangers on the deal, with Merrill the left lead.

Proceeds from the credit facility will be used to help fund the company's spinoff from Sara Lee Corp., including the payment of a $2.4 billion dividend to Sara Lee. The businesses to be spun off into Hanesbrands include Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra. Following the spinoff, Winston-Salem, N.C.-based Hanesbrands will operate as a stand-alone, publicly traded, global apparel company.

In addition to the senior secured credit facility, the company will also be getting a $500 million one-year bridge loan facility that will be funded for the time being.

The bridge loan is expected to be taken out with proceeds from a $500 million senior notes offering soon.

Morgan Stanley and Merrill Lynch are joint leads on the bridge loan/bond offering, with Morgan Stanley on the left.

Toys, UAL trade up

Toys 'R' Us Inc.'s and UAL Corp.'s term loan debt was a touch stronger in trading on Wednesday with no specific reasons seen behind the movement, leaving market technicals as the assumed impetus, according to a trader.

Toys 'R' Us, a Wayne, N.J., specialty toy retailer, saw its term loan move up by an eighth to a quarter of a point to 102¼ bid, 102¾ offered, the trader said.

And, UAL, an Elk Grove Township, Ill., airline, saw its term loan move up about an eighth of a point to 101½ bid, 102 offered, the trader added.

Coleman closes

The creation of Coleman Natural Foods LLC through the merger of BC Natural Foods, LLC with KDSB Holdings, LLC was completed, according to a news release.

To help fund the transaction, Coleman got a new $180 million credit facility consisting of a $45 million ABL revolver, a $100 million first-lien term loan at Libor plus 300 basis points and a $35 million second-lien term loan at Libor plus 700 basis points.

Deutsche Bank acted as the lead bank on the deal.

Coleman is a Golden, Colo., processor, marketer and distributor of fresh and further prepared natural and organic proteins.

Travelport closes

The Blackstone Group completed its leveraged buyout of Travelport Inc. from Cendant Corp. for $4.3 billion in cash, according to a news release.

To help fund the LBO, Travelport got a new $2.6 billion senior secured credit facility (B1/B+) consisting of a $275 million six-year revolver priced at Libor plus 275 basis points, a $125 million seven-year synthetic letter-of-credit facility priced at Libor plus 300 basis points with a step down to Libor plus 275 basis points at 41/2x leverage, and a $2.2 billion seven-year term loan with the U.S. piece priced at Libor plus 300 basis points with a step down to Libor plus 275 basis points at 41/2x leverage and the €620 million euro piece priced at Libor plus 275 basis points.

Of the total $275 million revolver amount, $175 million is in U.S. dollars and $100 million is multicurrency including euro, sterling and dollar.

During syndication pricing on the U.S. term loan and the synthetic letter-of-credit facility was flexed up from original talk at launch of Libor plus 250 to 275 basis points with the addition of the step down, and pricing on the euro term loan and the revolver firmed up at the wide end of original guidance of Libor plus 250 to 275 basis points.

In addition, during syndication the size of the euro term loan firmed up from original guidance of at least €500 and possibly as high as €750 million.

UBS, Credit Suisse and Lehman Brothers acted as the lead banks on the deal.

Travelport is a Parsippany, N.J., travel distribution services company.

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