Pinnacle Entertainment breaks in the 101s; Nortek ticks higher on second day of trading

By Sara Rosenberg

New York, Aug. 25 - Pinnacle Entertainment Inc.'s $400 million amended credit facility allocated and quietly broke for trading, with the institutional paper quoted in the 101 plus context. Meanwhile, Nortek Holdings Inc.'s term loan inched its way to slightly higher levels as the paper traded around a bit in Wednesday's market.

Pinnacle's $275 million term loan opened at 101 bid, 101½ offered on the break and remained at the level throughout the day as the paper wasn't "trading around much," according to a trader.

Originally, the term loan was sized at $250 million but was increased last week. Pricing on the term loan remained at Libor plus 300 basis points throughout syndication. A portion of the term loan is delayed draw for 12 months and contains an unfunded fee of 100 basis points.

Pinnacle's facility also contains a $125 million revolver. Essentially, through this amendment deal, the company increased its revolver size from $75 million and left pricing unchanged. Initially though, the company was only planning on increasing the revolver to $100 million. At the time of the term loan upsizing, the syndicate opted to upsize the revolver as well.

Proceeds from the amended credit facility will be used to reprice and replace the existing term loan, which carries an interest rate of Libor plus 350 basis points, and help fund the increased scope and budget of the company's Lake Charles project.

The upsizings were possible since the deal was nicely oversubscribed, and the extra funds will come in handy being that the company has a lot of projects.

On the day of the July launch, some existing lenders had already placed orders and some even tried to increase their positions, so it's no surprise that the facility ended up being oversubscribed. New lenders were really only approached for the revolver.

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

Pinnacle is a Las Vegas owner and operator of gaming entertainment facilities.

Nortek edges higher

Nortek's $700 million seven-year term loan (B1/B+) pushed its way into stronger territory on Wednesday, with some trading taking place in the 101 to 101 1/8 context, according to a trader.

The tranche broke for trading during the previous session at par ½ bid, 101. But before Tuesday was over, the paper moved to par 5/8 bid, par ¾ offered and then moved again to close at par ¾ bid, par 7/8 offered.

The term loan is priced with an interest rate of Libor plus 250 basis points with a step down in pricing to Libor plus 225 basis points if leverage falls below 4.5x. Originally, the tranche was talked at Libor plus 275 basis points but it was reverse flexed and the stepdown was added on oversubscription.

Nortek, a Providence, R.I., designer, manufacturer and marketer of residential and commercial building products, is owned by some members of management and Kelso and Co. LP.

Entravision closes

Entravision Communications Corp. closed on its $400 million senior secured credit facility (B1/B+) consisting of a $175 million 71/2-year term loan B with an interest rate of Libor plus 175 basis points, a $75 million delayed-draw term loan B with an interest rate of Libor plus 175 basis points and a $150 million 61/2-year revolver with an interest rate of Libor plus 200 basis points.

Originally, pricing guidance on all tranches was set at Libor plus 200 to 225 basis points and then was lowered to the Libor plus 200 basis points area soon after launch on oversubscription. The term loan B and delayed-draw term loan were then reverse flexed to current pricing because demand was so high.

In fact, Entravision was oversubscribed within a few hours of the July 28 bank meeting as several orders came in pre and post meeting, with some attributing the success to positive investor sentiment toward deals in the broadcasting sector.

"We are pleased that investors are recognizing our strong operating performance and growth opportunities. This new facility will lower our overall cost of capital and provide financial flexibility as Entravision continues to grow," said John DeLorenzo, chief financial officer, in a company news release.

Goldman Sachs and Union Bank of California were joint lead arrangers and joint bookrunners on the deal, with Goldman listed on the left. Goldman also acted as syndication agent while Union Bank of California acted as administrative agent.

Proceeds were used to refinance outstanding bank borrowings under the company's existing $400 million credit facility. Borrowings are also available for general corporate purposes and to fund the potential repurchase of the company's remaining series A preferred shares.

Entravision is a Santa Monica, Calif., diversified Spanish-language media company.

Cinram closes

Cinram International Inc. closed on its amended $1.175 billion credit facility that included getting a new $668 million term loan D (BB) to replace the previous term loan B and term loan C at a lower rate, and lowering the interest rate on the existing term loan A. Citigroup was the lead bank on the deal.

The term loan D due 2009 is priced with an interest rate of Libor plus 300 basis points. Before the refinancing, the term loan B due 2009 was priced with an interest rate of Libor plus 375 basis points and the term loan C due 2010 was priced with an interest rate of Libor plus 575 basis points.

The interest rate on the outstanding principal amount of $181 million on Cinram's $250 million term loan A was reduced to Libor plus 250 basis points from Libor plus 300 basis points. The term loan A still matures in 2007.

Also, as part of the refinancing, the company also negotiated more favorable debt covenants to improve its financial flexibility.

"The financial markets continue to recognize Cinram's improving credit quality. These amendments reflect the benefits of our deleveraging strategy and of improved financial performance," said Lewis Ritchie, chief financial officer, in a news release. "These amendments also represent significant cost savings and will provide us with greater financial flexibility going forward."

In addition to using the term D to repay the two institutional term loans, Cinram also used $65 million in cash.

The terms of the $150 million undrawn revolver were unchanged throughout this process.

Cinram is a Toronto, Ont., provider of pre-recorded multimedia products and logistic services.

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