Primary heats up as flood of news deals line up for launch

By Sara Rosenberg

New York, June 18 - The primary bank loan market is on fire as numerous deals are slated to launch in the June 21 week including a monster-sized deal for Blockbuster Inc. of $1.45 billion, a $775 million deal for American Coal Holdings Inc., a $600 million deal for Rent-A-Center Inc. and more than a handful of smaller-scale deals.

Blockbuster's $1.45 billion credit facility consists of a $500 million seven-year revolver, a $200 million seven-year term loan A and a $750 million seven-year term loan B.

JPMorgan, Citigroup and Credit Suisse First Boston are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds will be used help fund the Viacom Inc. "split off" with a special distribution of $5 per share, or about $905 million, to stockholders and to pay some of the transaction costs related to the special distribution, the split-off and credit agreement. The credit facility will also be available for working capital and general corporate purposes.

Blockbuster is a provider of in-home movies and game entertainment.

American Coal Thursday

American Coal Holding Inc.'s $775 million credit facility is now set to launch on Thursday, as opposed to the previously expected Wednesday launch date, according to a syndicate document.

Citigroup and Credit Suisse First Boston are joint lead arrangers and joint bookrunners, with Citigroup also acting as administrative agent and CSFB also acting as syndication agent. UBS is documentation agent.

Proceeds from the facility will be used to help fund the acquisition of American Coal by a private equity consortium consisting of First Reserve Corp., The Blackstone Group and American Metals & Coal International from RAG Coal International for a purchase price of about $1 billion.

American Coal is a Linthicum Heights, Md., coal mine company.

Rent-A-Center next week

It is now anticipated that a bank meeting to launch Rent-A-Center Inc.'s proposed $600 million senior credit facility will take place some time during the June 21 week, although a specific day is not yet available, according to an informed source.

Lehman Brothers and JPMorgan are co-lead arrangers and joint bookrunners on the deal, with Lehman listed on the left.

As was previously reported, the facility consists of a $400 million term loan and a $200 million revolver. Price talk on the tranches is not being revealed at this time either.

The company is looking to refinance its existing credit to get lower interest rates and to renegotiate covenants, including the basket to repurchase stock and the capital expenditures requirement, a company spokesman previously told Prospect News. The decision to seek the refinancing at the present time was based on the strength of the credit market and the company's enhanced credit standing since being upgraded by Standard & Poor's.

Rent-A-Center's existing credit facility contains a $400 million term loan with an interest rate of Libor plus 225 basis points, a $120 million revolver with an interest rate of Libor plus 200 basis points and an $80 million letter-of-credit facility with an interest rate of Libor plus 225 basis points, the spokesman added. At March 31, the company had a total of $397 million outstanding under its term loan and $90.3 million of availability under its revolver.

In addition to repaying the existing facility, Rent-A-Center will use proceeds for general corporate purposes.

The Plano, Texas, operator of rental purchase stores expects to complete the transaction in the third quarter.

Harbor Freight Thursday

Harbor Freight Tools is scheduled to hold a bank meeting on Thursday for a proposed $500 million credit facility consisting of a $60 million five-year revolver and a $440 million seven-year term loan B.

Credit Suisse First Boston and UBS are joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used for recapitalization purposes.

Harbor Freight Tools is a Camarillo, Calif., tool and equipment catalog retailer.

Merisant Wednesday

Merisant Co. is scheduled to hold a bank meeting on Wednesday for a proposed $255 million credit facility consisting of a $35 million five-year revolver, a $50 million six-year euro term loan and a $170 million six-year term loan B.

Credit Suisse First Boston and RBC are the joint lead arrangers and joint bookrunners on the deal.

Proceeds will be used by the Chicago low-calorie sweetener company for recapitalization purposes.

Yonkers Tuesday

A bank meeting for Tuesday has been scheduled to launch Yonkers Raceway's $185 million term loan with price talk in the Libor plus 325 to 350 basis points context, subject to ratings.

Merrill Lynch is the lead bank on the deal.

Proceeds will be used by the Yonkers, N.Y., horse racing track to fund construction.

Ripplewood Monday

Ripplewood Phosphorus LLC is scheduled to hold a bank meeting Monday afternoon for a proposed $165 million senior secured credit facility (B+) consisting of a $25 million five-year revolver with price talk of Libor plus 300 basis points and a $140 million seven-year term loan with price talk of Libor plus 325 basis points.

UBS Warburg is the lead bank on the deal.

Proceeds will be 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.

Apollo/Eastman Tuesday

Apollo Management LP's is set to launch a $145 million credit facility on Tuesday consisting of a $30 million revolver and a $115 million term loan B.

JPMorgan and Bear Stearns are the lead arrangers on the facility, with JPMorgan listed on the left.

Proceeds will be used to help finance the acquisition of some businesses and product lines in Eastman Chemical Co.'s coatings, adhesives, specialty polymers and inks segment.

PlayCore Wednesday

And, PlayCore Inc. is scheduled to hold a bank meeting for a $145 million credit facility on Wednesday consisting of a $15 million five-year revolver, a $50 million five-year first-lien term loan, a $40 million six-year second-lien term loan and a $40 million 61/2-year third-lien term loan.

Credit Suisse First Boston is the sole lead arranger and bookrunner on the deal.

Proceeds will be used for LBO financing, the document added. Currently, PlayCore is owned by Chartwell Investments.

PlayCore is a Chattanooga, Tenn., playground equipment manufacturer.

Alliance Laundry ups B size, lowers pricing

Alliance Laundry Systems LLC recently made some modifications to its term loan B that included increasing the size of the tranche and reverse flexing pricing on the tranche for a second time on overwhelming demand as the deal was oversubscribed multiple times, according to an informed source.

The term loan B is now sized at $135 million, up from an original size of $110 million, and pricing is now set at Libor plus 300 basis points. Originally, the institutional tranche was priced with an interest rate of Libor plus 375 basis points but was reverse flexed to Libor plus 325 basis points.

In order to compensate for the larger term loan B, the company opted to decrease its subordinated debt issue by $25 million.

The now $185 million (B2/B) credit facility also contains a $50 million revolver that was left unchanged since launch with an interest rate of Libor plus 375 basis points.

With these changes, senior leverage will now be 2.25x, up from 1.8x, and total leverage will remain at the expected level of 4.4x, the source added.

CIBC World Markets Corp. and Lehman Brothers Inc. are joint lead arrangers and joint book managers on the deal, with CIBC listed on the left.

Proceeds from the credit facility, combined with proceeds from an Income Deposit Securities sale and notes offering, will be used to redeem the company's 9 5/8% notes in a tender offer and consent solicitation, repay all borrowings under the company's existing credit facility, repay its junior notes, redeem the mandatorily redeemable preferred membership interests in Alliance Laundry Systems held by affiliates of Trust Co. of the West and affiliates of Sankaty Advisors, fund working capital, and to buy back the company's equity investors' remaining equity interests.

Alliance Laundry is a Ripon, Wis., manufacturer of commercial laundry products.

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