Riddell Bell breaks at 101 plus; Professional Paint bid ticks up; Bally reveals price talk

By Sara Rosenberg

New York, Sept. 23 - Riddell Bell Holdings Inc. (Bell Sports Corp.) allocated and broke for trading on Thursday, with the institutional paper topping 101 in the secondary market. And the bid on Professional Paint Inc.'s loan inched its way higher in an attempt to find possible sellers and get some trading momentum started. Meanwhile, on the primary side, pricing was revealed on Bally Total Fitness Holding Corp.'s newly launched loan.

Riddell Bell's $110 million term loan opened at 101¼ bid, 101½ offered on the break and was quoted there pretty consistently throughout the day as the paper traded "a bunch of times," according to a trader. However, late in the session a bid of 101 3/8 did surface from a different dealer, another source added.

On Wednesday, the syndicate reverse flexed the term loan to Libor plus 250 basis points from price talk of Libor plus 275 to 300 basis points and added a step down in pricing to Libor plus 225 basis points under certain conditions. The term loan was offered to investors at par during syndication.

Goldman Sachs and Wachovia are joint leads on the deal, with Goldman listed on the left. UBS and Antares are co-documentation agents.

Riddell Bell's $160 million credit facility (B1/BB-) also contains a $50 million revolver with an interest rate of Libor plus 275 basis points. The revolver was offered to investors at 99 for a $10 million commitment.

Proceeds from the loan, combined with proceeds from a $140 million bond deal that priced at the low end of talk Thursday at 8 3/8%, will be used to help fund Fenway Partners Inc.'s acquisition of Bell Sports.

Under the acquisition agreement, Fenway will purchase Bell Sports from an investor group including GarMark Partners LP, Wachovia Investors Inc. and Chartwell Investors, for about $240 million. The transaction will merge Bell Sports and Riddell Sports Group, which Fenway purchased in June 2003.

Bell Sports is an Irving, Texas, marketer of helmets and accessories for bicycling and other action sports. Riddell is a Chicago provider of football helmets and other branded sporting goods, equipment reconditioning services and sports collectibles.

Professional Paint bid rises

The bid on Professional Paint's recently allocated term loan rose to par ½ on Thursday morning from the prior par 3/8 level in an unsuccessful move to try to entice some investors to sell, according to a fund manager.

"I still haven't seen any offers," the fund manager said. "Obviously people don't like that bid. They want it to go higher before they sell paper with a 3¼ coupon."

Professional Paint's $156 million term loan allocated on Wednesday, and opening levels were basically set at par 3/8 bid, par 7/8 offered, however, there was no trading activity in the name.

Professional Paint is a Denver-based manufacturer and distributor of architectural paints and coatings.

Pricing surfaces on Bally

Pricing of Libor plus 450 basis points emerged on Bally Total Fitness' proposed $175 million five-year term loan B that launched via a bank meeting on Thursday, according to a market source.

J.P. Morgan Securities Inc. is the lead arranger on the deal that will be used by the Chicago commercial operator of fitness centers to refinance existing debt including the existing $100 million securitization facility.

Calpine second lien up

Calpine Corp.'s second-lien loan was about a point better on the day as the company revealed plans to sell convertible notes and first-priority senior secured notes, creating a nice amount of positive sentiment in various markets and triggering a "fair amount of activity" on the bank debt side because of swaps, a trader told Prospect News.

"The bond market is reacting positively because [Calpine] can come to market with any new securities and, it's being well received. The convert is a little bigger in size than expected so that was a nice surprise. [Also] It helps liquidity. [Plus] now that news is out, there are no more surprises. People are relieved that they're doing what they said they were going to do," the trader said.

The second-lien bank debt was quoted at 87 bid, 87½ offered by one trader, while a second trader quoted it a bit more conservatively at 85¾ bid, 87 offered.

On Thursday, San Jose, Calif.-based power company Calpine announced that it would sell about $600 million of new unsecured convertible notes due 2014 via sole bookrunner Deutsche Bank Securities Inc. and about $785 million of first-priority senior secured notes due 2014 via Merrill Lynch. Both deals are expected to price Monday.

Proceeds from the convertibles will be used to redeem High Tides I and High Tides II and to redeem or repurchase other existing debt through open-market purchases. Net proceeds from the bond offering are also expected to be used to redeem or repurchase existing debt through open-market purchases.

Concurrent with the offerings, Calpine will use cash on hand to repurchase about $266 million principal amount of its existing 4¾% unsecured convertible notes due 2023 from Deutsche Bank and will call the remaining $198.5 million principal amount of its 5¾% High Tides I and the remaining $285 million principal amount of its 5½% High Tides II.

Cooper-Standard for October

Cooper-Standard Automotive's proposed credit facility - with a currently contemplated size of $625 million - is now expected to launch via a bank meeting sometime in October, although specifics on timing are still not available, according to a market source.

As was previously reported, Deutsche Bank and Lehman Brothers are joint lead arrangers and joint bookrunners on the deal, with Deutsche listed on the left. Goldman Sachs and UBS are co-documentation agents.

At this time, the facility is expected to consist of a $125 million revolver and a $500 million term loan B, but tranching is still very fluid.

Proceeds will be used to help fund the acquisition of Cooper-Standard by an entity formed by The Cypress Group and Goldman Sachs Capital Partners from Cooper Tire & Rubber Co. for about $1.165 billion in cash.

As part of the LBO financing package, Cooper-Standard also plans on approaching the high-yield market with a potential $400 million bond offering via joint book running managers Deutsche Bank, Lehman Brothers, Goldman Sachs and UBS, the source added.

The transaction, which is subject to financing and regulatory approvals, is anticipated to close in the fourth quarter.

Cooper-Standard Automotive is a Novi, Mich.-based manufacturer of fluid handling systems, body sealing systems, and active and passive vibration control systems, primarily for automotive original equipment manufacturers.

Rite Aid closes

Rite Aid Corp. closed on its $1.4 billion amended and restated senior secured credit facility due September 2009 consisting of a $450 million term loan priced with an interest rate of Libor plus 175 basis points and a $950 million revolver priced with an interest rate of Libor plus 175 basis points.

The revolver was originally sized at $850 million but was increased during syndication.

Citigroup and JPMorgan are the lead banks on the Camp Hill, Pa., drugstore chain's deal, with Citigroup listed on the left.

Rite Aid also closed on a new $400 million three-year securitization facility due in September 2007.

Proceeds of the new credit and securitization facilities and about $330 million of available cash on hand were used to repay the existing $1.15 billion term loan priced at Libor plus 300 basis points and to replace the existing $700 million revolver priced at Libor plus 350 basis points - a move that essentially removed Rite Aid from the institutional market and into the pro rata market and reduced borrowing costs across the board. The new $950 million revolver will be drawn down by about $60 million at closing.

"We continue to reduce debt and improve the financial flexibility of our company," said Mary Sammons, president and chief executive officer, in a company news release. "With this new refinancing, we also have more capital available to invest in our business as we continue to focus on growth."

Vanguard closes

Vanguard Health Systems Inc. closed on its new $1.05 billion credit facility (B2/B), consisting of a $250 million six-year revolver, a $475 million term loan B, a $175 million delayed-draw term loan and a $150 million delayed-draw acquisition term loan.

Bank of America and Citigroup were the lead banks on the deal, with Bank of America listed on the left.

Proceeds were used to help fund The Blackstone Group's acquisition of a majority equity interest in Vanguard in a transaction valued at about $1.75 billion. In connection with the transaction, both management and Morgan Stanley Capital Partners reinvested in Vanguard, together owning approximately 34%.

Vanguard is a Nashville, Tenn., owner and operator of acute care hospitals and related health care services.

Whiting Petroleum closes

Whiting Petroleum Corp. closed on its new $480 million four-year credit facility and borrowed $400 million under the loan to fund the acquisition of 17 fields in the Permian Basin of West Texas and Southeast New Mexico for $345 million in cash and to refinance the debt outstanding under the prior credit facility, according to a company news release.

Whiting Petroleum is a Denver-based company involved in oil and natural gas exploitation, acquisition and production activities.

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