Builders FirstSource allocates, first lien term loan reaches 101 in first day of trading

By Sara Rosenberg

New York, March 16 - Builders FirstSource allocated and broke for trading on Tuesday afternoon, with the first lien term loan steadily moving up throughout the day to reach 101 levels.

On the break, the first lien term loan was quoted at par ½ bid, according to a fund manager. By late day the tranche was seen at 101 bid, 101.125 offered, the fund manager said, while a trader placed the paper a little wider at 101 bid, 101½ offered.

The second lien term loan was quoted at 99 bid, 99½ offered by the end of the day, the fund manager added.

The $230 million first lien term loan (B+) is priced with an interest rate of Libor plus 325 basis points, and the $85 million 61/2-year second lien term loan is priced with an interest rate of Libor plus 850 basis points. The second lien tranche has a 2% Libor floor, call protection of 102 in the first year and 101 in the second year and was offered with an upfront fee of 1%.

Originally the deal was launched with a $150 million first lien term loan priced at Libor plus 300 basis points and a $165 million second lien term loan priced at Libor plus 600 basis points. The deal was later restructured to include a $200 million first lien term loan priced at Libor plus 300 basis points and a $115 million second lien term loan priced at Libor plus 750 basis points. And then, the facility was restructured one last time with the current terms.

So, all in all, since launching into the primary market, the first lien term loan has been increased by a total of $80 million and flexed up by 25 basis points, and the second lien term loan was decreased by a total of $80 million, flexed up by a total of 250 basis points and saw the addition of both a Libor floor and an upfront fee.

The $405 million senior secured credit facility also contains a $90 million five-year revolver (B+) with an interest rate of Libor plus 275 basis points, unchanged during syndication.

Proceeds from the credit facility will be used to support JLL Partners' recapitalization of the company.

UBS is acting as sole lead arranger and administrative agent, and Bear Stearns is acting as co-arranger and syndication agent.

Builders FirstSource is a Dallas supplier of building products to professional, large-scale homebuilders.

CalGen heavy

Calpine Generating Co. LLC's term loans headed lower on Tuesday for no particular reason other than heaviness in the name and heaviness in the overall bank loan market, according to a trader.

The $835 million five-year first lien term loan/note was quoted at 99¾ bid, par offered, compared to Monday's levels of par ¼ bid, par ½ offered, while the $740 million six-year second lien floating-rate loan/note was quoted at 96 bid, 96½ offered, compared to Monday's levels of 97 bid, 98 offered, the trader said.

The first lien paper due April 1, 2009 carries an interest rate of Libor plus 375 basis points, contains three years of call protection and has a Libor floor of 125 basis points.

The second lien paper due April 1, 2010 carries an interest rate of Libor plus 575 basis points, has four years of call protection and contains a Libor floor of 125 basis points.

Proceeds, combined with proceeds of two tranches of notes totaling $830 million, will be used to refinance the $2.5 billion CCFC II credit facility that matures in November 2004.

The new financing transactions are expected to close on March 23.

CalGen is a subsidiary of San Jose, Calif., power generator Calpine Corp.

Aearo sets launch date

Aearo Corp. has scheduled a bank meeting for Friday to launch its $175 million credit facility, according to a market source. Previously, the deal was expected to be March business but specific timing had not been established.

The credit facility consists of a $125 million term loan and a $50 million revolver. Pricing is still to be determined.

Deutsche Bank and Bear Stearns are leading the deals, with Deutsche listed on the left.

Proceeds will be used in combination with proceeds from a $175 million high-yield notes issuance to help support Bear Stearns Merchant Banking's acquisition of the company from Vestar Capital for $385 million, including assumed debt of about $210 million.

Upon closing of the acquisition, which is expected in early April, Aearo's management team will make a substantial capital investment and will own about a quarter of the company's fully diluted common stock, including options. Vestar Capital and its affiliates plan to retain up to 10% of the company's stock at closing, according to a company news release.

Aearo is an Indianapolis-based personal protection equipment company.

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