PanAmSat ups term loan B pricing as bond deal prices wide of talk

By Sara Rosenberg

New York, July 30 - PanAmSat Corp. increased pricing on its term loan B by 25 basis points to Libor plus 275 basis points on Friday morning in reaction to the company's $1.01 billion bond deal pricing wide at 9%.

"They got [the whole bond deal] done, which is good news for us," a market source said referring to the bank market. "The bank debt is done too. [But] with bonds pricing wide they increased the bank debt as well."

When price talk first surfaced on PanAmSat's 10-year senior notes it was placed in the 8¼% to 8½% context. However, the company later widened price talk on the deal all the way up to 9%, which is where the transaction ended up getting done.

Interestingly, initial price talk on the $1.86 billion seven-year term loan B was Libor plus 275 basis points but the syndicate opted to go out with Libor plus 250 basis points pricing at launch because strong ratings of Ba3/BB+ came out for the deal, a source previously told Prospect News.

The $2.91 billion credit facility also contains a $250 million five-year revolver with an interest rate of Libor plus 250 basis points and a 50 basis points commitment fee, and an $800 million five-year term loan A with an interest rate of Libor plus 250 basis points. Pricing on these tranches was unchanged throughout syndication.

Allocations on the credit facility may occur as early as Monday, the source added.

The facility launched to managing agents toward the end of June at which time 10 institutions were invited to participate in the meeting. The bank meeting for retail syndication occurred in mid-July.

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

Proceeds from the credit facility, combined with proceeds from the 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.

As part of the LBO, the Wilton, Conn., satellite operator launched consent solicitations and tender offers for its 6 1/8% and 8½% notes.

On Wednesday, PanAmSat announced that it received consents and tenders of more than 91% of its $275 million 6 1/8% notes due 2005 by the early tender deadline and more than 99% of its $800 million 8½% senior notes due 2012 by the consent deadline. The company also extended the expiration of the tender to Aug. 18 from Aug. 13.

Boise Cascade post Labor Day

The launch of Boise Cascade LLC's credit facility that is being obtained in connection with the acquisition of some Boise Cascade Corp. assets is expected to be a post-Labor Day event, a market source told Prospect News Friday.

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

Boise Cascade LLC, a new company formed by Madison Dearborn Partners LLC, will acquire Boise Cascade Corp.'s paper, forest products and timberland assets for about $3.7 billion.

Furthermore, it is expected that the company will also be issuing some high-yield bonds as part of the acquisition financing.

The acquisition is expected to close by mid-November.

Boise Cascade LLC will be based in Boise, Idaho. Included in the acquisition is the Boise Cascade Corp. headquarters building in Boise, Idaho, Boise Building Solutions, a producer of plywood, lumber, particleboard and engineered wood products, Boise Paper Solutions, a manufacturer of uncoated free sheet papers, and timberlands.

Loews trades; loan closes

Loews Cineplex Entertainment Corp.'s $630 million seven-year term loan B continued to trade in the 101 bid, 101¼ context Friday after breaking at those levels on Thursday, according to a trader. The tranche is priced with an interest rate of Libor plus 225 basis points.

Originally, the term loan was sized at $530 million and priced at Libor plus 275 basis points, but was upsized last week after the $100 million downsizing of the senior subordinated notes offering to $315 million and reverse flexed on strong bank reception.

Loews' facility also contains a $100 million six-year revolver with an interest rate of Libor plus 275 basis points and a 50 basis points commitment fee, and a $100 million delay draw term loan.

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

Proceeds from the facility were used to help fund the acquisition of Loews by a corporation formed by Bain Capital, The Carlyle Group and Spectrum Equity Investors for $1.5 billion from Onex Corp. and Oaktree Capital Management LLC. Closing of the Loews's deal was announced on Friday.

Loews is a New York-based movie theater chain.

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