Bucyrus, Coleto Creek break, with both deals' term loans quoted at 101 bid

By Sara Rosenberg

New York, July 23 - Bucyrus International Inc. and Coleto Creek WLE LP broke for trading on Friday, with Bucyrus' term loan and Coleto's first- and second-lien term loans reaching 101 on the bid side during their first day of trading.

More specifically, Bucyrus' term loan was quoted at the 101 bid, 101½ offered level pretty much since first hitting the secondary market through day's end, according to a trader.

The $100 million term loan is priced with an interest rate of Libor plus 225 basis points. Initially, the tranche was launched with pricing of Libor plus 250 basis points but was later reverse flexed after multiple subscription levels were reached.

Coleto Creek's first- and second-lien term loans both quoted at 101 bid, 101 5/8 offered by the end of the day, according to a trader.

The $205 million seven-year term loan B (Ba2/BB/BB) is priced with an interest rate of Libor plus 225 basis points after being reverse flexed during syndication from Libor plus 250 basis points, and the $150 million eight-year second-lien term loan C (Ba3/BB-/BB-) is priced with an interest rate of Libor plus 350 basis points. The term loan C came at the tight end of the original Libor plus 350 to 375 basis points price talk.

Bucyrus' $150 million senior secured credit facility (BB-) also contains a $50 million revolver with an interest rate of Libor plus 250 basis points.

When initial price talk first emerged in May, both tranches were talked in the Libor plus 300 basis points context and the revolver had been fully syndicated.

Goldman Sachs Credit Partners LP and GMAC Commercial Finance LLC are the lead banks on the deal.

Proceeds from the bank deal, combined with proceeds from an initial public offering, will be used to redeem all the company's $150 million outstanding 9¾% senior notes due 2007 and repay its existing bank debt.

On Thursday, Bucyrus priced its offering of 10.75 million shares of class A common stock at $18.00 per share.

Bucyrus is a South Milwaukee, Wis., manufacturer of surface mining equipment.

Coleto Creek's $460 million credit facility also contains a $50 million 51/4-year letter-of-credit facility (Ba2/BB/BB) with an interest rate of Libor plus 225 basis points, also flexed down from Libor plus 250 basis points during syndication, and a $55 million 51/4-year revolver with an interest rate of Libor plus 250 basis points (Ba2/BB/BB).

Citigroup, Goldman Sachs and JPMorgan are the lead banks on the deal, with Citi listed on the left.

Proceeds will be used to help fund the acquisition of Coleto Creek Power Station and nine other Texas power plants by joint venture partners Sempra Energy Partners and Carlyle/Riverstone Global Energy & Power Fund II LP from AEP Texas Central Co. for $430 million.

The acquisition itself closed on July 1. The joint venture partners have entered into power-purchase agreements, representing more than 90% of the output of Coleto Creek Power LP.

Coleto Creek is a Goliad County, Texas, coal-fired power plant.

Charter rebounds

Charter Communications Inc.'s term loan A and term loan B bank debt rebounded from Thursday's loss, moving up by about an eighth to a quarter of a point, according to a trader.

The term loan A was quoted at 97 7/8 bid, 98 1/8 offered, compared to a previous level of 97¾ bid, 98 offered, and the term loan B was quoted at 99 bid, 99¼ offered, compared to a previous level of 98¾ bid, 99¼ offered, the trader said.

The St. Louis communications company's paper had been under some pressure on news of a term B auction and a negative equity report that was put out by UBS.

On Thursday, there was an auction on the term loan B at which time about $8 million was sold off at around 99 to 991/4.

On Wednesday, UBS put out an equity report cutting its rating on Charter's stock to "reduce" from "neutral."

"People got scared. Equity's been down [for the] past couple of days. $8 million went out and people got nervous," the trader explained.

Rockwood cuts B spread

Rockwood Specialties Group Inc. reverse flexed its $1.05 billion seven-year term loan B to Libor plus 250 basis points from Libor plus 275 basis points and added a stepdown to Libor plus 225 basis point if leverage falls below 2.25x being that the tranche was two times oversubscribed, according to a market source.

Pricing was unchanged on the revolver, term loan A and term loan C, the source added.

The $250 million six-year revolver is priced with an interest rate of Libor plus 250 basis points and a commitment fee of 50 basis points, the $250 million six-year term loan A is priced with an interest rate of Libor plus 250 basis points and the $300 million eight-year term loan C is priced with an interest rate of Libor plus 300 basis points with no grid.

Credit Suisse First Boston, UBS and Goldman Sachs are the joint lead arrangers and joint bookrunners on the financing.

Proceeds from the $1.85 billion credit facility (B1/B+), combined with proceeds from a bond offering and equity, will be used to help fund the acquisition of four chemical businesses of Germany-based Dynamit Nobel.

The equity for the transaction will be provided by Rockwood's internal resources, its existing majority shareholder Kohlberg Kravis Roberts & Co. LP and by CSFB Private Equity. The sponsors bid €2.25 billion for the four business units.

Closing of the transaction is planned for the third quarter of 2004 and is subject to approval by the supervisory board and annual general meeting of MG Technologies, parent company of Dynamit Nobel, as well as by the relevant antitrust authorities.

Rockwood is a Princeton, N.J., specialty chemicals and advanced materials company.

AES repricing

AES Corp. is coming to market next week with a repricing amendment via Citigroup, according to a market source.

No further details on the Arlington, Va., power company's proposal were available prior to press time.

Duane Reade closes on revolver

Duane Reade Inc. closed on its amended asset-based revolver (B+), increasing the size to $250 million from $200 million, according to a company news release. Bank of America's Retail Finance Group was the lead bank on the deal.

Besides changing the size, changes were made to the terms of the credit facility to reduce the New York drugstore chain's overall borrowing cost, the release added.

The additional capacity will be used to maintain approximately $100 million of borrowing availability under the credit facility upon completion of the proposed acquisition of Duane Reade by an affiliate of Oak Hill Capital Partners LP and the related refinancing of its debt.

Ripplewood closes

Ripplewood Phosphorus LLC closed on its $165 million senior secured credit facility (B+) this week, according to a market source. UBS Warburg was the lead bank on the deal.

The facility consists of a $25 million five-year revolver with an interest rate of Libor plus 300 basis points and a $140 million seven-year term loan with an interest rate of Libor plus 300 basis points that steps down to Libor plus 275 basis points if the deal gets a B1 rating from Moody's Investors Service.

Initially the term loan tranche was launched with price talk of Libor plus 325 basis points but was reverse flexed during syndication on strong demand.

Proceeds are being used to help fund Ripplewood Holdings LLC's acquisition of Akzo Nobel's phosphorus chemicals business for €230 million free of cash and debt.

Ripplewood Phosphorus is a Chicago producer of organophosphorus flame retardants and functional fluids.

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