Intertape Polymer grabs some commitments within a few hours of launch

By Sara Rosenberg

New York, July 6 - Intertape Polymer Group Inc.'s newly launched credit facility had already received some commitments by the end of the day and the bank meeting was said to have gone well even though the deal launched on the first day back from a long holiday weekend.

"[There's] already a couple of commitments in. It's a nice way to start a new deal," a market source told Prospect News.

The $250 million facility (B+) consists of a $75 million revolver and a $175 million term loan, with both tranches talked at Libor plus 275 basis points.

The term loan is being offered to investors at par. Upfront fees on the revolver are 100 basis points for a $15 million commitment and 75 basis points for a $10 million commitment.

Citigroup is the sole lead bank on the deal.

Proceeds along with proceeds from a proposed $125 million senior subordinated notes offering from wholly owned, newly formed finance subsidiary Intertape Polymer US Inc. will be used to repay an existing credit facility, redeem all three series of existing senior secured notes and pay related make-whole premiums, accrued interest and transaction fees.

Intertape Polymer Group is a Bradenton, Fla., developer and manufacturer of specialized polyolefin plastic and paper packaging products and complementary packaging systems.

Loews sets launch

Loews Cineplex Entertainment Corp. sent out invites to potential lenders on Tuesday morning announcing the newly scheduled Thursday bank meeting that will launch syndication of the company's proposed credit facility, according to a market source.

However, although the launch is only two days away, details on the financing, including size, structure and pricing, are still not available, the source added.

Credit Suisse First Boston and Citigroup are the lead banks on the deal.

Proceeds from the facility will be used to help fund the acquisition of Loews by a corporation formed by Bain Capital, The Carlyle Group and Spectrum Equity Investors for C$2.0 billion from Onex Corp. and Oaktree Capital Management LLC.

Under the acquisition agreement, Onex and Oaktree will retain the Loews interest in Cineplex Galaxy, which operates the Loews theater business in Canada as well as Galaxy Entertainment.

The assets being acquired include Loews' operations in the United States, Grupo Cinemex, and its 50% interests in Megabox Cineplex of Korea and Yelmo Cineplex of Spain.

It is expected that the sale, which is subject to customary regulatory approvals, will close during the third quarter.

Loews is a New York-based movie theater chain.

Ceradyne sets talk

Price talk of Libor plus 225 basis points surfaced on Ceradyne Inc.'s $110 million seven-year term loan B, according to a fund manager.

Furthermore, specific timing was announced with the bank meeting scheduled for Friday. Previously, it was only known that the deal would launch this week.

Company slides shown during a conference call last week estimated that the term loan would carry an interest rate of Libor plus 250 basis points, however, a source close to the deal had previously disputed that estimation saying that pricing would probably come lower at launch.

"It seems like it's kind of a small company. Given their coming to us for the first time, [pricing] is probably a little low," the fund manager said.

Prior to this proposed deal, Ceradyne only had a $10 million revolver with no borrowings outstanding as of March 31.

The proposed facility (Ba3) also contains a $50 million five-year revolver. The company estimated pricing on the revolver to fall to around Libor plus 200 basis points.

Wachovia Capital Markets LLC is the led bank on the deal.

Proceeds from the credit facility along with cash will be used to help fund the acquisition of ESK Ceramics, which is expected to close in the third quarter.

Under the acquisition agreement, Ceradyne will purchase the Germany based industrial technical ceramic manufacturer for about €111.4 million in cash payable at closing.

Ceradyne is a Costa Mesa, Calif., developer, manufacturer and marketer of advanced technical ceramic products and components for defense, industrial, automotive/diesel and commercial applications.

Levi higher

Levi Strauss & Co.'s bank debt traded at slightly higher levels on Tuesday with the paper closing the day at 106¼ bid, 106¾ offered, according to a trader.

Recently, the company's bonds have firmed up on renewal of market speculation that the company might be nearing a sale of its Dockers line.

However, when asked whether this may have in any way played a part in Tuesday's bank debt activity, the trader said, "It's up for no particular reason. It hasn't moved like the bonds on the Dockers rumor."

Levi Strauss is a San Francisco brand name clothing company.

Georgia-Pacific closes

Georgia-Pacific Corp. closed on its new $2.5 billion five-year senior unsecured credit facility. Banc of America Securities LLC, Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. were the joint lead arrangers and joint book managers on the deal.

Furthermore, Bank of America is administrative agent, swing line lender and letter-of-credit issuer, Citibank and JPMorgan Chase Bank are co-syndication agents and Goldman Sachs Credit Partners LP, BNP Paribas and UBS Loan Finance LLC are co-documentation agents, according to an 8-K filed with the Securities and Exchange Committee on Tuesday.

The facility consists of a $500 million non-amortizing term loan with an initial interest rate of Libor plus 137.5 basis points and a $2 billion revolver with an initial interest rate of Libor plus 107.5 basis points, with a 30 basis points facility fee.

Pricing on the term loan and the revolver is grid based depending on the company's leverage ratio.

If leverage is less than or equal to 2.25-to-1.0, then pricing on the term loan is Libor plus 75 basis points; if leverage is less than or equal to 3.25-to-1.0 but greater than 2.25-to-1.0, then pricing on the term loan is Libor plus 100 basis points; if leverage is less than or equal to 4.00-to-1.0 but greater than 3.25-to-1.0, then pricing on the term loan is Libor plus 137.5 basis points; and if leverage is greater than 4.00-to-1.0, then pricing on the term loan is Libor plus 187.5 basis points.

If leverage is less than or equal to 2.25-to-1.0, then pricing on the revolver is Libor plus 55 basis points; if leverage is less than or equal to 3.25-to-1.0 but greater than 2.25-to-1.0, then pricing on the revolver is Libor plus 75 basis points; if leverage is less than or equal to 4.00-to-1.0 but greater than 3.25-to-1.0, then pricing on the revolver is Libor plus 107.5 basis points; and if leverage is greater than 4.00-to-1.0, then pricing on the revolver is Libor plus 147.5 basis points, the filing said.

The facility fee rate on the revolver can range from 20 to 40 basis points also depending on leverage, the filing added.

Proceeds will be used for general corporate purposes. The new credit facility replaces a $2.25 billion five-year facility that would have matured November 2005.

"We are pleased to complete this new agreement well ahead of the expiration of the earlier facility," said Danny Huff, executive vice president, finance and chief financial officer, in a company news release. "More importantly, this facility includes terms that will allow Georgia-Pacific to realize pricing reductions as the company improves its leverage ratio. This facility will provide us with additional financial flexibility moving forward."

Georgia-Pacific is an Atlanta maker of tissue, packaging, paper, building products, pulp and related chemicals.

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