Mark IV Industries, Natural Products free to trade; Coleto Creek sets talk as ratings surface

By Sara Rosenberg

New York, June 16 - Mark IV Industries Inc. and Natural Products Group LLC both allocated their credit facilities on Friday, with Mark IV's first-lien term loan trading atop par and its second-lien term loan trading around 102, and Natural Products' first-lien term loan B bid atop par.

In primary happenings, Coleto Creek LP came out with price talk on its billion dollar plus credit facility as ratings on the transaction were released.

Mark IV Industries' credit facility broke for trading early on in the session, with the $749 million first-lien institutional term loan (B1/BB) quoted at par 3/8 bid, par 5/8 offered and the $150 million second-lien term loan (B3/BB-) quoted at 101¾ bid, 102¼ offered, according to traders.

The first-lien term loan due June 2011 is priced with an interest rate of Libor plus 250 basis points. During syndication, the tranche was upsized from $729 million and pricing firmed up at the tight end of original guidance of Libor plus 250 to 275 basis points.

The first-lien term loan debt includes about $145 million of incremental debt and the repricing of about $604 million of existing first-lien debt. Before the deal was launched, the company was thinking of just doing an add-on to its first-lien loan at existing pricing of Libor plus 300 basis points, but when it actually came to market, the plan was changed to include rolling the existing first-lien debt into a new term loan with lower pricing.

The 51/2-year second-lien term loan is priced with an interest rate of Libor plus 575 basis points. During syndication, the tranche was downsized from $170 million and pricing was reduced from original talk at launch of Libor plus 600 to 625 basis points.

There is soft call protection of 102 in year one and 101 in year two on voluntary prepayments under the second-lien loan.

Bear Stearns, JPMorgan and Credit Suisse are joint lead arrangers and joint bookrunners on the deal, with Bear Stearns the administrative agent on the second-lien loan and JPMorgan the administrative agent on the term loan B add-on.

Proceeds from the incremental term loan debt will be used to fund a tender offer and consent solicitation for the company's $250 million of 7½% senior subordinated notes due 2007, which expires on June 19, after being extended from the original expiration deadline of June 13.

The company's existing $150 million revolver and euro term loan are remaining in place as is.

Mark IV is an Amherst, N.Y., maker of engineered systems and components for transportation infrastructure, vehicles and equipment.

Natural Products breaks

Natural Products Group's credit facility hit the secondary during Friday's market hours, with the $385 million seven-year first-lien term loan B quoted at par 3/8 bid, no offers immediately following the break and throughout the rest of the session, according to a market source.

The first-lien term loan B is priced with an interest rate of Libor plus 300 basis points. During syndication, the tranche was upsized by $20 million from $365 million.

Natural Products' $605 million credit also includes a $195 million 71/2-year second-lien term loan with an interest rate of Libor plus 650 basis points and a $25 million six-year revolver with an interest rate of Libor plus 300 basis points and a 50 basis point commitment fee.

During syndication, this the second-lien term loan was upsized by $20 million as well, increasing from an original size of $175 million.

CIBC and Credit Suisse are the joint lead arrangers on the dividend recapitalization deal.

The term loan upsizings were a result of the company's decision to increase its dividend payment by a total of $50 million, with $40 million coming from the incremental first- and second-lien term loan debt and $10 million coming from additional cash on hand.

Natural Products Group, a Harvest Partners portfolio company, is a Chatsworth, Calif., manufacturer and marketer of branded natural and organic personal care products.

Coleto sets spread talk

Coleto Creek came out with price talk on its $1.165 billion credit facility as ratings from both Moody's Investors Service and Standard & Poor's emerged on the transaction, according to a market source.

The $60 million revolver, $935 million term loan and $170 million synthetic letter-of-credit facility are all being talked at Libor plus 275 basis points based on the B2/B+ ratings that were announced during Friday's market hours, the source said.

Credit Suisse and Goldman Sachs are joint leads on the deal that was already launched with a bank meeting on June 8.

Proceeds will be used to help fund American National Power Inc.'s $1.14 billion acquisition of the 632 megawatt coal-fired Coleto Creek Power generation facility in Goliad County, Texas, from Topaz Power Group.

In addition, American National's parent company, International Power plc, will contribute $288 million toward the purchase that will come from the current liquid resources.

The majority of Coleto Creek's output is forward contracted to 2009. Additional forward contracts have been agreed and will be put in place through to 2013 for about 50% of the plant's output. The credit support required for these forward hedging arrangements will be provided within the financing facility.

International Power is a London-based independent electricity generating company, and American National Power is the company's wholly owned subsidiary with operations in the United States.

Texas Petrochemicals adds prefunded LoC

Texas Petrochemicals Inc. has added a $70 million 21/2-year prefunded letter-of-credit facility tranche (Ba3/B+) to its credit facility that will convert into a term loan once it is drawn, according to a market source.

On the flip side, the seven-year covenant-light term B (Ba3/B+) now carries a size of $210 million as opposed to the original size of $280 million, the source said.

Price talk on the prefunded letter-of-credit facility and the term loan is Libor plus 225 bps to 250 basis points, which is where the term loan was talked when the deal first launched in April.

Syndication had been put on hold after the April launch because of problems with the Huntsman Corp. assets that the company is purchasing. Huntsman experienced a fire in its Port Arthur, Texas, olefins manufacturing plant at the end of April, and although this plant is not one of the assets being acquired by Texas Petrochemicals, it does provide the C4 supply to assets being acquired.

As a result, the acquisition agreement has been restructured so that Texas Petrochemicals will pay $197.5 million for the Huntsman U.S. butadiene and related MTBE operations at closing, subject to customary adjustments, and an additional payment of $70 million will be made upon the satisfaction of certain milestones related to the resumption of crude C4 supply from Huntsman's Port Arthur, Texas, unit.

The prefunded letter-of-credit facility was incorporated into the credit structure to back the $70 million conditional additional payment.

Texas Petrochemicals' $395 million credit facility, which was publicly re-launched this past Thursday, also includes a $115 million five-year asset-based revolver talked at Libor plus 150 basis points with a 37.5 basis point commitment fee.

Deutsche Bank and Credit Suisse are joint lead arrangers on the term loan and letter-of-credit facility, with Deutsche the left lead. Deutsche and LaSalle are joint lead arrangers on the revolver, with Deutsche the left lead.

Commitments are due on Wednesday, with closing and funding targeted for June 27.

Texas Petrochemicals is a Houston-based chemical company.

Green Mountain closes

Green Mountain Coffee Roasters, Inc. closed on its new $125 million five-year senior secured revolving credit facility, according to a company news release. Bank of America acted as the lead bank on the deal.

The revolver carries an initial interest rate of Libor plus 175 basis points.

Proceeds were used to help fund the acquisition of Keurig Inc. for $104.3 million and to refinance existing debt.

Green Mountain is a Waterbury, Vt., roaster and seller of specialty coffee products.

Libbey closes

Libbey Inc. closed on its new $150 million senior secured revolving credit facility due May 2011, according to a company news release.

Proceeds from the revolver were used to help finance the purchase of the remaining 51% equity interest in its Mexican joint venture that it currently does not own, to repay existing bank debt, to redeem senior notes and to refinance the euro-denominated working capital line of credit at Libbey Europe BV.

Libbey is a Toledo, Ohio, operator of glass tableware manufacturing plants.

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