Key Automotive breaks with first-, second-lien term loans moving to the 101 area

By Sara Rosenberg

New York, June 24 - Key Automotive's $475 million credit facility allocated and broke for trading on Thursday, with both term loans reaching levels in the 101 context upon hitting the secondary.

More specifically, the term loan B was quoted at 101¼ bid, 101½ offered and the term loan C was quoted at 101 bid, 101¼ offered, according to a trader. Both term loans were originally offered to investors at par.

The $275 million six-year term loan B is priced with an interest rate of Libor plus 300 basis points, and the $125 million seven-year second-lien term loan C is priced with an interest rate of Libor plus 575 basis points.

Key's facility also contains a $75 million five-year revolver with an interest rate of Libor plus 300 basis points that was reverse flexed from Libor plus 325 basis points during syndication.

Citigroup and Merrill Lynch Capital are the lead banks on the deal, with Citigroup listed on the left.

Proceeds will be used for a dividend recapitalization.

PlayCore pricing surfaces

Pricing on PlayCore Inc.'s proposed $145 million credit facility emerged ahead of Friday's bank meeting, with the $15 million five-year revolver priced with an interest rate of Libor plus 500 basis points, the $50 million five-year first-lien term loan priced with an interest rate of Libor plus 500 basis points, the $40 million six-year second-lien term loan priced with an interest rate of Libor plus 900 basis points and the $40 million 61/2-year third-lien term loan priced at 18%, according to a syndicate document.

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

The deal was originally scheduled to launch on Wednesday but was pushed off until Friday, with some guessing that rescheduling was simply due to CSFB being overloaded with new deal launches this week.

Proceeds will be used to refinance existing debt, not for LBO financing as was previously reported.

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

Skilled Healthcare shuffles tranches

Skilled Healthcare Group Inc.'s credit facility underwent some size readjustments resulting in a slightly smaller $260 million credit facility, as opposed to the previously expected size of $265 million.

The facility now consists of a $35 million five-year revolver, a $140 million six-year first-lien term loan and an $85 million seven-year second-lien term loan, according to a syndicate document.

Originally the deal was expected to consist of a $30 million five-year revolver, a $155 million six-year first lien-term loan and an $80 million seven-year second-lien term loan, according to a prior syndicate document.

Pricing on the tranches is still to be determined.

Credit Suisse First Boston and Goldman Sachs are joint lead arrangers and joint bookrunners on the deal, which is scheduled to launch via a bank meeting on Monday.

Proceeds will be used to refinance existing debt.

Skilled Healthcare is a Foothill Ranch, Calif., operator of long-term care facilities and a provider of a full continuum of post-acute care services.

Pride Offshore drops pricing

Pride Offshore Inc., a wholly owned subsidiary of Pride International Inc., lowered pricing on its $300 million seven-year term loan B to Libor plus 175 basis points from Libor plus 200 basis points, according to a market source.

The $500 million five-year revolver remained unchanged with an interest rate of Libor plus 175 basis points and a commitment fee of 37.5 basis points.

Citigroup is the sole lead bank on the deal.

Proceeds will be used to refinance existing debt.

Pride International is a Houston provider of contract drilling services to oil and gas exploration and production companies.

Harbor Freight draws excitement

Harbor Freight Tools' $490 million credit facility generated enthusiasm among potential investors upon launching into the bank loan market on Thursday with "people already calling in saying they love it", according to a market source.

There was a "big turnout" at the bank meeting, the source added. It's a "great story. It's going to be a blowout."

The facility consists of a $440 million six-year term loan B with an interest rate of Libor plus 300 basis points and a $50 million five-year revolver with an interest rate of Libor plus 275 basis points.

UBS and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the deal, with UBS listed on the left.

Proceeds will be used for to pay a dividend recap.

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

Otis Spunkmeyer closes

Otis Spunkmeyer Inc. closed on its upsized $172.5 million credit facility (B1/B+) on Thursday, according to a market source. Merrill Lynch and JPMorgan were the lead banks on the deal.

Originally the deal was launched as a $170 million credit facility consisting of a $20 million six-year revolver with an interest rate of Libor plus 375 basis points and a $150 million 6.5-year term loan B with an interest rate of Libor plus 375 basis points.

Pricing on the deal closed at those levels, but whether the extra $2.5 million was added to the term loan tranche or to the revolver tranche was unavailable prior to press time.

Proceeds were used by the San Leandro, Calif., cookie company to refinance its existing term loan.

Range Resources closes

Range Resources Corp. closed on its revolver increase that upped the borrowing base to $500 million, according to a company news release. Essentially what the company did was combine its existing bank debt with that of Great Lakes Energy Partners LLC and restructured the two facilities into one large one.

Previously, Range Resources had a $375 million revolver with a borrowing base of $240 million and about $171 million drawn.

Great Lakes had a $275 million revolver with a borrowing base of $225 million and about $68 million drawn.

Proceeds from the newly increased revolver, combined with proceeds from a $149 million common stock sale and a $100 million offering of senior subordinated notes, were used to help fund the acquisition of the 50% of Great Lakes that Range Resources did not previously own for $200 million plus the assumption of $68 million of Great Lakes bank debt and the retirement of $27 million of oil and gas commodity hedges.

After closing the acquisition and financings, the available liquidity under the bank facility was about $180 million compared to less than $50 million prior to the transaction.

"Acquiring the rest of the Great Lakes joint venture is an extremely attractive transaction for Range. We purchased a substantial volume of high-margin, long-life natural gas reserves in properties we know exceedingly well. Furthermore, there are significant opportunities to enhance the value of these assets given our sizeable operating base in the Basin, our 1.5 million acre leasehold position and the proven Great Lakes operating team," said John H. Pinkerton, president, in the release.

"The properties' substantial current production and high margins will immediately benefit our shareholders. Their long reserve life and exceptional development and exploratory potential suggest the benefits of the acquisition should extend for many years to come. Importantly, the transaction greatly simplifies our corporate structure, allowing us to focus our energies on executing our balanced strategy of growth through the drill bit and complementary acquisitions," he said.

Range Resources is a Fort Worth, Texas, independent oil and gas company.

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