Revlon hits the ground running, jumps from low 102 to mid-103 bid within minutes

By Sara Rosenberg

New York, July 7 - Revlon Consumers Products Corp.'s $960 million credit facility broke for trading late in the day Wednesday, with the term loan B first bid at plus 102 levels and then steadily climbing higher to plus 103 levels all within a half hour.

"It broke at pretty good levels. The first bid I saw was at 4:15 [p.m. ET] at 102 1/8. And, it's running up from there," a trader said, adding that he saw the paper quoted at 103 3/8 bid, 103 7/8 offered and then he saw the bid jump again to 103 5/8.

By evening, the paper had settled at 103½ bid, 104 offered, according to a second trader.

The six-year term loan (B3/B-) is sized at $800 million, is priced with an interest rate of Libor plus 600 basis points and contains call protection of 105 in year one, 103 in year two and 101 in year three.

Initially the term loan was launched as a $750 million tranche with price talk of Libor plus 600 to 625 basis points and call protection of 105 in year one, 103 in year two, 102 in year three and 101 in year four.

However, the term loan came at the low end of talk, call protection was modified and the size was increased in response to overwhelming demand that led to oversubscription of the tranche almost immediately after launch.

The facility also contains a $160 million five-year asset-based revolving credit facility, which was left unchanged in size and pricing since launch, with an interest rate of Libor plus 250 basis points and an undrawn commitment fee of 50 basis points.

There is only one financial covenant under the term loan and that is a maximum senior secured leverage test which is set at 51/2x at December 2004 and gradually reduces to 41/2x at the beginning of the first quarter of 2007.

On a March 2004 last-12-months basis, total debt to EBITDA is about 7.8x.

Proceeds will be used to refinance the existing credit facility that has about $290 million outstanding, to refinance the approximately $363 million 12% senior secured notes and to pay about $95 million in transactional fees and expenses, tender costs and accrued interest.

Citigroup is the lead bank on the credit facility.

Revlon is a New York manufacturer and seller of cosmetics and skin care, fragrance and personal care products.

CACI up on contract news

CACI International Inc.'s bank debt headed higher on Wednesday as news surfaced that the General Services Administration decided not to bar or suspend the company from contracts.

The paper was quoted at 99¾ bid, par ¼ offered, up from Tuesday's levels of 99 bid, 99½ offered, a trader said.

The company has been under investigation due to allegations of improper employee behavior toward prisoners in Iraq.

CACI is an Arlington, Va., provider of IT and network solutions.

Scotts likely next week

The Scotts Co. is "probably" going to launch its $400 million credit facility next week that will be used along with $100 million of cash on hand to refinance and retire the company's existing $500 million term loan B, according to a market source. JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan listed on the left.

The facility consists of a $200 million term loan A and a $200 million term loan B. Price talk is not yet available, the source said.

The new term loan facilities will provide for lower interest rate spreads and will modify many of the borrowing covenants, providing additional operating flexibility, a company news release previously said.

Scotts is a Marysville, Ohio, marketer of branded consumer products for lawn and garden care.

Horizon Lines closes

Horizon Lines LLC closed on its $275 million credit facility (B2/B+) on Wednesday, according to a market source. UBS and Goldman Sachs were joint lead arrangers on the credit facility, with UBS listed on the left. ABN Amro was the documentation agent.

The facility consists of a $250 million seven-year term loan with an interest rate of Libor plus 275 basis points, reverse flexed from Libor plus 300 basis points late last week, and a $25 million five-year revolver with an interest rate of Libor plus 250 basis points, unchanged since launch, although prior to hitting the market talk was that the revolver would be priced at Libor plus 275 basis points.

The pricing reduction on the term loan was due to overwhelming interest that led to oversubscription of the tranche.

Some of the credit facility's success could be attributed to existing lenders as some had already signed up to roll over their commitments and potentially upsize their positions on the June 17 launch date.

Proceeds from the bank deal and a bond deal are being used to help fund Castle Harlan Inc.'s previously announced acquisition of Horizon Lines from The Carlyle Group for $650 million. Castle Harlan Partners IV LP, an investment fund totaling $1.163 billion in commitments that closed last September, is the actual buyer of Horizon Lines.

Total leverage is 5x and senior leverage is 2.5x.

Horizon Lines is a Charlotte, N.C., container shipping company.

Coinstar closes

Coinstar Inc. closed on its $310 million credit facility (Ba3/BB-) consisting of a $250 million seven-year term loan with an interest rate of Libor plus 225 basis points and a $60 million five-year revolver. JPMorgan and Lehman Brothers were the lead banks on the deal, with JPMorgan listed on the left.

Bank of America, KeyBank and Wells Fargo Bank served as documentation agents for the financing and are also participating in the revolver, according to a company news release.

Pricing on the term loan, which was originally sold to investors at par, steps down to Libor plus 200 basis points if total leverage falls below 2½ times annual EBITDA.

Initially, the term loan was talked at Libor plus 250 to 275 basis points but was reverse flexed during syndication as something like $1 billion in commitments flooded into the book.

Proceeds from the term loan were used to help fund the acquisition of American Coin Merchandising Inc.

The revolver is available for general corporate purposes.

Customary covenants apply to the term loan, including maximum total leverage, interest coverage, capital expenditure limits, stock repurchase and dividend limitations and standard restrictions on investments and mergers and acquisitions. In addition, the company is required to enter into interest rate protection agreements in the amount of $125 million, the news release said.

Coinstar is a Bellevue, Wash., owner and operator of automated self-service coin-counting machines.

BWAY closes

BWAY Corp. closed on its $255 million credit facility (B1/B+) consisting of a $30 million revolver with an interest rate of Libor plus 275 basis points and a $225 million term loan with an interest rate of Libor plus 225 basis points. Deutsche Bank and JPMorgan Chase Bank were joint lead arrangers on the deal, with Deutsche listed on the left.

Pricing on the term loan was reduced from Libor plus 275 basis points during syndication due to strong demand.

Proceeds from the term loan, combined with a $30 million equity contribution, were used to help fund the acquisition of North America Packaging Corp. and to repay and terminate BWAY's existing credit facility.

The revolver was undrawn at closing.

BWAY is an Atlanta manufacturer of steel and plastic containers.

Belden & Blake closes

Belden & Blake Corp. closed on its $170 million credit facility (B2/BB-) consisting of a $100 million term loan with an interest rate of Libor plus 275 basis points, a $30 million revolver with an interest rate of Libor plus 275 basis points and a $40 million letter-of-credit facility with an interest rate of Libor plus 275 basis points.

The term loan priced at the cheap end of guidance that ranged from Libor plus 275 to 300 basis points since the deal was heavily oversubscribed.

Furthermore, a stepdown in pricing was added to the term loan during syndication under which the interest rate reduces to Libor plus 250 basis points if first-lien leverage falls below 1.5 times. Currently, leverage on a first-lien basis is 1.5 times.

Goldman Sachs was the sole lead bank on the deal.

Proceeds, combined with proceeds from a $192.5 million senior secured notes offering, were used to help fund Belden's merger with an affiliate of Carlyle/Riverstone Global Energy & Power Fund II LP.

Carlyle/Riverstone, through its new partnership with Capital C Energy LLC, entered into a cash merger agreement to acquire all of the outstanding stock of Belden & Blake.

"The acquisition has been accomplished through a financing structure that captures the benefits of today's attractive commodity prices and minimizes risk," said Gregory A. Beard, principal of Carlyle/Riverstone, in a company news release.

Belden & Blake is a Canton, Ohio, oil and gas producer. Capital C is a Houston-based company that seeks to accumulate a portfolio of domestic oil and gas assets.

Ames True Temper closes

Castle Harlan completed its acquisition of Ames True Temper Inc. from Wind Point Partners in a transaction valued at $380 million, according to a company news release.

To help fund the leveraged buyout, Ames True Temper closed on a new $215 million credit facility (B2) consisting of a $140 million term loan B and $75 million of pro rata bank debt.

Bank of America was the lead bank on the credit facility.

The equity capital for the acquisition was provided by Castle Harlan Partners IV LP, a $1.163 billion investment fund that closed last August.

Ames True Temper is a Camp Hill, Pa., non-powered lawn and garden tool company.

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