Huntsman pushes into 102s; Nextel wraps around 99; Levi stronger on numbers, Dockers sale progress

By Sara Rosenberg and Paul Deckelman

New York, July 13 - Two very large deals - Huntsman International LLC and Nextel Communications Inc. - broke for trading on Tuesday, with Huntsman rallying to plus 102 levels and Nextel trading below its original issue price, which is not uncommon for a revolver structured like an investment-grade vehicle. Meanwhile, Levi Strauss & Co.'s bank debt headed higher by about half a point as the company put out positive second quarter numbers and alluded to progress in the possible Dockers sale.

Huntsman's $1.365 billion term loan "opened in the mid-101s, closing in the low-102s," a trader said. However, according to a second trader, the paper never really traded in the mid-101 area and therefore he believes that it broke in "the upper 101s and then moved to the 102s."

The tranche, which is priced at Libor plus 325 basis points, ended the day quoted at 102 bid, 102¼ offered, according to the second trader.

The term loan matures on Dec. 31, 2008 but can be extended to Dec. 31, 2010 if some conditions are met.

Huntsman's $1.74 billion credit facility (B1/B), which already closed, according to a company news release, also contains a $375 million revolver.

Deutsche Bank and Citigroup are the lead banks on the deal, with Deutsche listed on the left.

Basically, with this transaction, the Salt Lake City chemical company consolidated the existing term loan B and term loan C into one large institutional term loan with an increased size of $125 million. As for the revolver, the company's aim was essentially to extend the maturity through Sept. 30, 2008.

Being that the entire capital structure is basically being changed through the extension of the loans' maturity dates, as well as through consolidation and increased liquidity, the whole deal was syndicated.

The $125 million incremental term loan proceeds will be used for general corporate purposes, which may include the construction of the low-density polyethylene facility at the Wilton, U.K., site.

Nextel below par

Nextel's $4 billion revolver (NA/BB+/BBB-) was quoted by one trader at 98½ bid, 99½ offered and by a second trader at 98 bid, 99 offered. A third trader saw the paper trade at both 98¾ and 99 during market hours.

"It's structured as an investment-grade revolver [that is] not secured, five-year. Usually investment-grade revolvers trade below new issue," the third trader said.

The revolver is priced with an interest rate of Libor plus 112.5 basis points.

JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds from the new revolver will be used by the Reston, Va., wireless company to replace the existing revolver and term loan A.

Levi up on earnings, Dockers sale

Levi's paper was quoted at 107 bid, 108 offered, according to a trader who explained that the paper is not heading down to paydown levels since it is currently in a non-call period, meaning investors could reject a paydown if they so desired.

For the second quarter, net sales were $959 million compared to $932 million for the second quarter of 2003, gross profit was $413 million compared to $393 million in the same period last year, operating income was $77 million compared to $63 million last year and net income was $6 million compared to a net loss of $42 million for the second quarter of 2003.

"So far, so good," said Phil Marineau, chief executive officer, in a company news release. "Overall, I'm pleased with our second-quarter performance, which delivered on our goal of improving our profitability this year. We still have a lot of work to do, but I'm encouraged by the progress we're making in all our businesses."

As of May 30, total debt, less cash, was $1.96 billion compared to $2.11 billion at the end of fiscal 2003. As of July 11, the company had available liquidity of about $552 million, consisting of about $287 million in highly liquid short-term investments and $265 million in net available borrowing capacity under its revolver.

"Our higher earnings and improved working capital management enabled us to bring net debt down this quarter. We continue to believe that we will be covenant compliant and have sufficient liquidity over the next 12 months," said Jim Fogarty, chief financial officer, in the release.

Also on Tuesday, Levi revealed that it would soon begin seeking consents for amendments from its senior secured term loan and asset-backed revolver lenders that would allow for the Dockers sale, provided that the application of sale proceeds results in a reduction in the company's net debt of at least 30% (see story elsewhere in this issue).

Bucyrus reverse flexes

Bucyrus international Inc. lowered pricing on its $100 million term loan to Libor plus 225 basis points from Libor plus 250 basis points being that the deal was multiply oversubscribed within a few days of launching, according to a market source.

The $150 million senior secured credit facility (BB-) also contains a $50 million revolver with an interest rate of Libor plus 250 basis points.

When initial price talk emerged in May, both tranches were talked in the Libor plus 300 basis points context and the revolver had been fully syndicated.

The deal was previously said to be around six to seven times oversubscribed since and, due to this strong demand, the commitment deadline was accelerated to Tuesday at which time the books will close.

Goldman Sachs Credit Partners LP and GMAC Commercial Finance LLC are the lead banks on the deal, which is expected to allocate alongside the initial public offering of common stock in a couple of weeks.

Proceeds from the bank deal, combined with expected proceeds of $122.6 million from the IPO, will be used to redeem all the company's $150 million outstanding 9¾% senior notes due 2007 and repay its existing bank debt.

Bucyrus is a South Milwaukee, Wis., manufacturer of surface mining equipment.

Kranson price talk, agents sign on

Price talk surfaced on Kranson Industries Inc.'s $170 million senior secured credit facility as the bank book was posted ahead of Wednesday's launch, with the $30 million six-year revolver talked at Libor plus 275 basis points and the $140 million seven-year term loan talked at Libor plus 300 basis points, according to a market source.

UBS Securities LLC is the lead bank on the deal. Scotia already signed on as syndication agent, and GE and Antares have already signed on as co-documentation agents, the source added.

Proceeds will be used to help fund AEA Investors LLC's leveraged buyout of Kranson, a St. Louis provider of rigid packaging containers and related components.

FairPoint upsized

FairPoint Communications Inc.'s credit facility was upsized to $500 million through an increase of the term loan B size to $400 million from $350 million, according to an S-1 filed with the Securities and Exchange Commission on Tuesday.

The five-year term loan is priced with an interest rate of Libor plus 350 basis points.

In addition, FairPoint's credit facility (B2/B+) contains a $100 million revolver priced with an interest rate of Libor plus 325 basis points.

Deutsche, CIBC and Citigroup are the lead banks on the deal, with Deutsche listed on the left.

The facility is being obtained in connection with the initial public offering of the company's Income Deposit Securities (IDS).

Proceeds from the term loan, combined with proceeds from the IDS and notes offerings, will be used to repay all outstanding loans under the existing credit facility and to fund the repurchase all outstanding senior notes and senior subordinated notes.

FairPoint is a Charlotte, N.C., provider of telecommunications services.

Mitchell starts strong

Syndication of Mitchell International Inc.'s $155 million credit facility is off to a running start as the book on the fist-lien term loan was already a "third full" and the book on the second-lien term loan was "coming along" by late afternoon, according to a market source.

The $95 million seven-year first-lien term loan is talked at Libor plus 300 to 325 basis points (B1) and the $45 million eight-year second-lien term loan is talked in the Libor plus 700 basis points context (B2), the source said.

The facility, which launched via a bank meeting on Tuesday, also contains a $15 million five-year first-lien revolver with an interest rate of Libor plus 300 basis points (B1).

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

Proceeds will be used to finance a cash dividend to existing shareholders, retire existing debt, fund a special employee bonus pool and provide working capital.

Mitchell is a San Diego provider of information products, software and e-business solutions for the auto insurance, collision repair, medical claims, and glass replacement industries.

Pan Am deal raises eyebrows

Although the expectation is that Pan Am International Flight Academy will get its newly launched $100 million credit facility "done," the deal itself had some scratching their heads in confusion, according to a fund manager.

"I'll look at it but my first thought was what in the hell is this," the fund manager said. "I'm not sure if we'll participate, it being so small. And, I'm not quite sure what they do besides flight training; and don't all airlines teach their pilots how to fly?"

The facility consists of a $10 million first-lien revolver with price talk of Libor plus 400 basis points, a $65 million first-lien term loan with price talk of Libor plus 400 basis points and a $25 million second-lien term loan with price talk of Libor plus 750 basis points, the source said.

CIBC is the lead bank on the deal.

Pan Am International Flight Academy is a Miami provider of aviation training.

PanAmSat sets retail launch

PanAmSat Corp.'s long awaited $2.91 billion credit facility is set to launch Thursday to retail investors, according to a market source, in line with the previous target for a bank meeting in mid-July.

"There already has been interest on the institutional side. Every deal in general has been a blowout so I don't think anyone is worried about it," the source said.

Furthermore, the "pro rata is pretty much done," the source added.

The facility consists of a $250 million five-year revolver talked at Libor plus 250 basis points with a 50 basis points commitment fee, an $800 million five-year term loan A talked at Libor plus 250 basis points and a $1.86 billion seven-year term loan B talked at Libor plus 275 basis points.

The facility already launched to managing agents toward the end of June at which time 10 institutions were invited to participate in the meeting.

Credit Suisse First Boston and Citigroup are the joint lead arrangers and joint bookrunners on the deal. Bear Stearns, Lehman Brothers and Bank of America are co-documentation agents.

Proceeds from the credit facility, combined with proceeds from a proposed bond offering, will be used to help fund the leveraged buyout of PanAmSat by affiliates of Kohlberg Kravis Roberts & Co. from The DirecTV Group Inc. in a transaction valued at about $4.3 billion, including the assumption of about $750 million of net debt.

The deal, which was first announced in April, has taken so long to materialize because it has to go through all sorts of regulatory approvals.

PanAmSat is a Wilton, Conn., satellite operator.

Scotts launching Thursday

Timing on Scotts Co.'s $400 million credit facility launch was nailed down with the deal slated to hit the market on Thursday, according to a market source.

The facility consists of a $200 million term loan A talked at Libor plus 125 basis points and a $200 million term loan B talked at Libor plus 150 basis points.

JPMorgan and Citigroup are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds from the term loans combined with cash on hand will be used refinance and retire the company's existing $500 million term loan B, providing for lower interest rate spreads and modifying many of the borrowing covenants for additional operating flexibility.

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

Coleto Creek reverse flexes

Coleto Creek WLE LP lowered pricing on its $205 million seven-year term loan B (Ba2/BB/BB) and $50 million 51/4-year letter-of-credit facility (Ba2/BB/BB) to Libor plus 225 basis points from Libor plus 250 basis points and firmed up pricing on its $150 million eight-year second-lien term loan C (Ba3/BB-/BB-) at Libor plus 350 basis points, the tight end of the Libor plus 350 to 375 basis points price talk, according to a market source.

Citigroup, Goldman Sachs and JPMorgan are the lead banks on the deal, with Citi listed on the left.

The $460 million credit facility also contains $55 million 51/4-year revolver with an interest rate of Libor plus 250 basis points (Ba2/BB/BB).

Proceeds will be used to help fund the acquisition of Coleto Creek Power Station and nine other Texas power plants by joint-venture partners Sempra Energy Partners and Carlyle/Riverstone Global Energy & Power Fund II LP from AEP Texas Central Co. for $430 million.

The acquisition itself closed on July 1. The joint-venture partners have entered into power-purchase agreements, representing more than 90% of the output of Coleto Creek Power LP.

Coleto Creek is a Goliad County, Texas, coal-fired power plant.

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