Oriental Trading breaks for trading with first lien around par 1/2, second lien around 101

By Sara Rosenberg

New York, Dec. 17 - Oriental Trading Co. Inc.'s $110 million add-on to its credit facility allocated and broke for trading on Wednesday with the first lien piece in the par ½ range and the second lien piece quoted in the 101 to 101 plus area, according to a market source.

According to one trader, the first lien paper broke at par ¼ bid, par ¾ offered, while a second source saw a number of trades on the paper take place at par 1/2.

As for the second lien, the trader remarked that it did not trade since allocations were so small but on the wide side it is being quoted at 101 bid, 102 offered. He added that throughout the day bids did not go higher than 101 3/8 to 1011/2.

"The second lien has call protection so that's why it's [quoted] around 101," the source added.

The facility consists of a $30 million six-year first lien add-on to the company's term loan B with an interest rate of Libor plus 275 basis points and an $80 million seven-year second lien add-on with an interest rate of Libor plus 600 basis points.

Originally, the deal consisted of a $25 million first lien add-on with an interest rate of Libor plus 300 basis points and a $75 million second lien add-on with an interest rate of Libor plus 650 basis points. However, the tranches were upsized and reverse flexed during syndication due to overwhelming demand.

BNP Paribas is the lead bank listed on the left for the first lien tranche, and Credit Suisse First Boston is the lead bank listed on the left for the second lien tranche.

Proceeds from the two add-ons are being used as part of the company's dividend recapitalization.

Oriental Trading is an Omaha, Neb., direct marketer of novelties, toys, party supplies, crafts, gift items, home décor products and garden accents.

Meanwhile, NRG Energy Inc.'s $1.45 billion exit financing facility (BB) is currently expected to allocate and break for trading on Thursday, according to a source close to the deal. The syndicate is aiming to close and fund the loan by Dec. 23.

Credit Suisse First Boston and Lehman Brothers are acting as joint lead arrangers on the Minneapolis energy company's deal.

The facility contains a $1.2 billion 61/2-year term loan B, increased from an original size of $950 million at the end of last week. The tranche carries an interest rate of Libor plus 400 basis points compared to initial pricing of Libor plus 450 basis points and a Libor floor of 1.50% compared to an initial Libor floor of 1.75%. Lastly, the upfront fee on the tranche is 991/2, changed from 99 during syndication.

There also is a $250 million four-year revolver with an interest rate of Libor plus 400 basis points, flexed down from initial pricing of Libor plus 425 basis points, and an unchanged commitment fee of 100 basis points. The Libor floor on this pro rata tranche was reduced to 1.50% from 1.75% as well. However, the upfront fee remained the same at 99.

Pricing reductions on the credit facility were of little surprise as the deal had in excess of $3 billion in the book two days after launching via a conference call.

NRG filed for Chapter 11 protection in May. On Dec. 5, the company announced that it successfully completed its Chapter 11 reorganization and emerged from bankruptcy.

Through the reorganization process, the company eliminated corporate level debt and other claims totaling more than $6 billion and emerged from Chapter 11 with $510 million of corporate debt and about $4.4 billion in project level debt.

As for the primary, now that Kinko's Inc. has revised some of the terms of its proposed credit facility including increasing pricing and adding soft call protection on the institutional piece, and adding a 50% excess free cash flow sweep, the deal is moving along to completion, according to a fund manager.

The facility now consists of a $675 million seven-year term loan B with an interest rate of Libor plus 325 basis points, increased from initial pricing of Libor plus 275 basis points, and a $150 million six-year revolver with an interest rate of Libor plus 250 basis points.

Soft call protection of 101 in year one was also added to the term loan B.

One fund manager had previously complained about the lack of an excess free cash flow sweep saying that since the company has no assets their significant generation of excess free cash flow is one of their main strengths.

"They're getting a lot closer now. Once they told people about those changes they started to get more orders in," the fund manager said.

Calls to accounts regarding the modifications started going out early this week.

JPMorgan and Bank of America are the lead banks on the deal that will be used to pay a $530 million dividend to the equity partners and refinance existing debt.

Kinko's is a Dallas-based operator of copying and printing centers.

Pinnacle Entertainment Inc. closed on its $300 million credit facility (B1/B+), according to a market source. Lehman Brothers and Bear Stearns are joint bookrunners and joint lead arrangers on the deal, with Lehman listed on the left and acting as administrative agent and Bear acting as syndication agent.

The facility consists of a $146 million funded term loan B with an interest rate of Libor plus 350 basis points, a $79 million delayed draw term loan B with an interest rate of Libor plus 350 basis points and a commitment fee of 125 basis points, and a $75 million revolver with an interest rate of Libor plus 350 basis points. The company has until Sept. 30, 2004 to draw on the delayed draw term loan.

Originally, the Las Vegas gaming company's deal was launched with a $140 million term loan B with price talk of Libor plus 375 basis points and a $75 million delayed draw term loan with price talk of Libor plus 375 basis points. However, due to overwhelming demand, the syndicate was able to reverse flex pricing on the institutional tranches by 25 basis points and increase the overall size of the B loan by $10 million. The revolver was left unchanged since launch.

The deal allocated and broke for trading last Friday with the term loan B straddling 101 on both the bid and the offer side.

Proceeds from the institutional paper are being used to refinance the company's existing facility, which was obtained to fund the Lake Charles project as well as a project in Belterra. However, a good portion of the project financing was being kept in a reserve account. So, with this upsized deal, the company is basically increasing what they have in that reserve account without having to draw on the proposed revolver as much as they previously anticipated, giving Pinnacle greater flexibility, a source close to the deal previously explained to Prospect News.

Alimentation Couche-Tard Inc. closed on its credit facility (Ba2), which was led by National Bank Financial, The Bank of Nova Scotia and CIBC World Markets Corp.

The facility consists of an approximately C$150 million five-year revolver with an interest rate of Libor plus 250 basis points, a U.S.$265 million equivalent Canadian five-year term loan facility with an interest rate of Libor plus 250 basis points and a U.S.$245 million seven-year term loan B with an interest rate of Libor plus 225 basis points.

The deal allocated and broke for trading on Tuesday with the U.S. dollar term loan quoted around par 5/8 bid, par 7/8 offered. The tranche remained in the same context during trading hours on Wednesday, according to a fund manager.

Proceeds from the credit facility, combined with proceeds from a $350 million bond offering, were used to help fund the acquisition of The Circle K Corp. from ConocoPhillips and for working capital purposes.

Alimentation Couche-Tard is a Canadian-based convenience store operator.

Equistar Chemicals LP closed on a new $250 million four-year inventory-based revolver (BB) and a $450 million four-year accounts receivable sales facility.

The facilities replace the Houston chemical company's previous $100 million accounts receivable sales agreement and a $354 million revolver.

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