American Safety Razor breaks for trading with first lien term loan quoted at plus 101 levels

By Sara Rosenberg

New York, April 28 - American Safety Razor Co.'s credit facility allocated and broke for trading, with the first lien term loan moving up into the 101 area in an otherwise slow secondary that was described by many participants as the quietest day in some time.

American Safety Razor's $160 million seven-year first lien term loan (B2/B) was quoted at 101 1/8 bid, 101 5/8 offered, a trader said. The tranche was offered to investors at par during syndication.

The $40 million 71/2-year second lien term loan (B3/CCC+) was not seen trading at all after allocations took place and therefore was not seen quoted, with the trader speculating that since the tranche was so small its probably snugly tucked away by investors.

Originally, American Safety Razor's deal was launched as a $150 million first lien term loan and a $50 million second lien term loan, but the sizes were changed during syndication.

Furthermore, along with these size changes, there were pricing modifications as well with the first lien term loan reverse flexing to Libor plus 325 basis points from pricing at launch of Libor plus 350 basis points, and the second lien term loan flexing up to Libor plus 700 basis points from pricing at launch of Libor plus 650 basis points.

There is call protection of 102 in year one and 101 in year two on the second lien tranche.

The company's $225 million senior credit facility also contains a $25 million five-year revolver (B2/B) priced with an interest rate of Libor plus 350 basis points, which was left unchanged throughout the entire syndication process.

UBS is the lead bank on the deal, which will be used to refinance existing debt.

Following completion of the transaction, first lien leverage will be 3.2 times and total leverage will be 4.3 times.

American Safety Razor, a J.W. Childs Associates LP portfolio company, is a Verona, Va., manufacturer of personal care consumer products primarily consisting of shaving razors and blades.

Emmis upsizes

Emmis Operating Co., a wholly owned subsidiary of Emmis Communications Corp., upsized its senior credit facility to $1.025 billion from $1 billion through an increase in its popular term loan B by $25 million to $675 million, according to a company news release. Furthermore, the company also increased its 6 7/8% senior subordinated notes offering that priced Tuesday by $25 million to $375 million.

Proceeds from the credit facility and the bond deal will be used to repay all debt under the existing credit facility of Emmis Operating, to repurchase or redeem all of the outstanding senior subordinated notes of Emmis Operating and to repurchase the senior discount notes of Emmis Communications.

"Due to higher-than-expected participation in Emmis Communications' tender offer for its 12½% senior discount notes due 2011, the aggregate amount of borrowing capacity under the new senior credit facility and the amount of notes being offered by Emmis Operating Co. are being increased from the amounts previously announced," the news release explained.

Emmis' $675 million term loan B is priced with an interest rate of Libor plus 200 basis points. The company's $350 million revolver is also priced with an interest rate of Libor plus 200 basis points.

The deal launched on April 16 to a very receptive market as a lot of orders were received within a couple of hours of the bank meeting as some investors did not take much time to think about participating being that they know the credit and its ability to trade high in the secondary.

More specifically, the existing term loan B is priced with an interest rate of Libor plus 225 basis points and traded at 101 plus in the secondary bank loan market, a source previously explained to Prospect News.

And, not only was the bank debt's previous performance a factor, but the company operates in a good sector and the deal itself is rated relatively well at Ba1, the source added.

Bank of America, Goldman Sachs, Deutsche Bank and Credit Suisse First Boston are the lead banks on the deal.

The credit facility and the sale of the senior subordinated notes are expected to close on May 10.

Emmis is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations.

Transwestern Pipe reverse flexes

Transwestern Pipeline recently reverse flexed pricing on its $400 million five-year term loan B to Libor plus 225 basis points from Libor plus 250 basis points, according to a syndicate source.

The company's $550 million credit facility (B1) also contains a $150 million four-year revolver with an interest rate of Libor plus 250 basis points.

Wachovia and SunTrust are the lead banks on the deal, with Wachovia listed on the left.

Proceeds will be used by the Houston owner and operator of natural gas pipeline systems to refinance existing debt.

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