Cinemark's return meets good reception; revolver gets devoured, B loan half done before launch

By Sara Rosenberg

New York, Jan. 31 - Cinemark USA Inc. has already completely syndicated the pro rata tranche of its $200 million credit facility (Ba3/BB-), which launched on Friday, and about half of the institutional tranche was requested by investors prior to the actual bank meeting.

"It's great," a syndicate source said of the progress Cinemark's deal had made by Friday afternoon. "The pro rata is done. GE signed on as an agent. Bank of New York signed on as an agent. Fleet signed on as an agent. Bank of America is a participant."

As for the term loan B, "we had orders before we launched," the syndicate source said. "Half was asked for prior to launch, so it will be gone fairly quickly."

The loan consists of a $75 million five-year revolver with an interest rate of Libor plus 300 basis points and a commitment fee of 50 basis points and a $125 million six-year term loan B with price talk of Libor plus 300 basis points, the syndicate source said.

The term loan B was offered at par, while the revolver carries an upfront fee of 75 basis points.

Proceeds, combined with a $150 million high-yield bond offering that went on the road on Friday, will be used to refinance 9 5/8% senior subordinated notes.

Lehman Brothers is the lead bank on the Plano, Tex. movie operator's loan, which was basically a revisit of the transaction that was attempted this past summer.

The company attempted to obtain a new $250 million credit facility a few months ago in conjunction with an initial public offering. However, due to poor equity market condition, the IPO was pulled and therefore the credit facility was tabled as well.

Cinemark isn't the first name to reappear on the calendar this month. Earlier in January the bank loan market saw the reemergence of Graham Packaging Co.'s credit facility and Casella Waste Systems Inc.'s credit facility.

Graham Packaging launched an $810 million credit facility consisting of a $660 million seven-year term loan B with an interest rate of Libor plus 325 basis points and a $150 million five-year revolver with an interest rate of Libor plus 325 basis points. Deutsche Bank is the lead arranger and bookrunner on the deal. Salomon Smith Barney is the syndication agent.

Proceeds will be used to help repay all indebtedness and accrued interest under the existing senior credit agreement, redeem $169 million senior discount notes due 2009 and to fund ongoing capital requirements and general corporate purposes.

Graham also previously attempted an IPO and new credit facility. At the end of July 2002, the company pulled a $700 million senior secured credit facility, which was contingent on the IPO, out of the market after the postponement of the IPO due to unfavorable market conditions. The company had financing in place and performing capital, making it possible for management to choose to wait for better market conditions.

Revival of the credit facility prompted expectations Graham would also make a second attempt at an IPO.

But the IPO is currently postponed awaiting better equity market conditions, Graham's investor relations official Mark Leiden told Prospect News Friday.

"We never really initiated it," he commented.

When equity market conditions improve the company will go revive the stock offering, Leiden added.

But he said the new credit facility remains on track.

There are some changes in the new offering compared to the original transaction that was attempted this summer. One in specific is the lack of a high yield offering in the new structure. Previously, the company proposed a $100 million add-on to its 8¾% subordinated notes due Jan. 15, 2008.

Graham Packaging is a York, Pa. designer, manufacturer and seller of customized blow molded plastic containers for the branded food and beverage, household and personal care and automotive lubricants markets.

Casella Waste Systems launched and closed on a $325 million senior secured credit facility consisting of a $175 million five-year revolver with an interest rate of Libor plus 300 basis points and a $150 million term loan B with an interest rate of Libor plus 325 basis points (after being flexed down by 25 basis points). The deal was brought in conjunction with the company's renewed intent to sell $150 million of senior subordinated notes.

Fleet Securities and Bank of America are the lead banks on the deal.

Proceeds from the notes combined with initial borrowing under the credit facility are being used to repay borrowings under the company's existing senior secured credit facility and for general corporate purposes.

Casella Waste Systems is a Rutland, Vt. provider of collection, transfer, disposal and recycling services.

In other news, the $137 million three-year term loan for the NY Mets baseball team that launched on Tuesday is said to be going well, according to a syndicate source. Lehman Brothers is the lead bank on the deal.

"It's a deal the institutional market hasn't seen a lot of before," the syndicate source told Prospect News. "Investors will look at this purely as a loan of value not on a cash flow basis. It's closing the week of February 24. We're going to bring people in on assignments that week."

The term loan has an interest rate of Libor plus 275 basis points.

This financing for the Mets was already funded in August 2002, the syndicate source explained, however, now it is in the process of being syndicated. Proceeds from the loan were used to help Fred Wilpon purchase the remaining 50% ownership in the team from Nelson Doubleday.

Tyco International Ltd. said its Tyco International Group SA subsidiary closed on its new $1.5 billion 364-day revolving credit facility.

Lead banks were Banc of America Securities LLC and Morgan Stanley Senior Funding, Inc.

"The closing of this bank credit facility, combined with our recently announced placement of $4.5 billion in convertible debentures, eliminates the liquidity gap that the company would have faced later this year," Tyco chairman and chief executive officer Ed Breen said in a news release. With these liquidity issues behind us, we can now focus all our attention on strengthening the operations of Tyco's solid businesses."

Levi Strauss & Co. said it closed on a new $750 million senior secured credit facility made up of a $375 million revolving credit facility and $375 million of term loans, reduced from $800 million made up of a $400 million revolver and $400 million term loan. The new facility replaces the company's existing bank facility under substantially similar terms and extends the date of maturity to March 31, 2006 and July 31, 2006, for the revolving credit facility and the term loans, respectively, Levi said. The company negotiated the credit facility through Citicorp North America, Inc., The Bank of Nova Scotia, Salomon Smith Barney Inc. and Banc of America Securities LLC.

St. Mary Land & Exploration Co. closed on its new $300 million three-year revolver with an initial interest rate of Libor plus 125 basis points. Wachovia Bank is the administrative agent and there are eight other co-agents involved in the deal.

The initial calculated borrowing base is set at $250 million after the closing of the acquisition of oil and gas properties from Flying J Oil & Gas Inc. and Big West Oil & Gas Inc. and the mortgage of these properties. St. Mary has accepted an initial commitment of $150 million under this new facility. The company has $76 million of bank debt outstanding after closing the acquisition.

St. Mary Land & Exploration is a Denver oil and gas exploration and production company.

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