Mediacom breaks, trading as high as par 3/4; Levi Strauss dips as company opts to keep Dockers

By Sara Rosenberg

New York, Oct. 18 - Mediacom LLC broke for trading Monday, with the term loan B trading at plus par levels throughout the session. Meanwhile, Levi Strauss & Co.'s floating-rate bank debt fell by about a point after the company announced plans to keep its Dockers business in the Levi family.

Mediacom's $550 million 81/2-year term loan B was quoted at par 3/8 bid, par ¾ offered by day's end, but the tranche saw activity at all sorts of levels above par during market hours with the highest trading level falling around par 3/4, according to traders.

The term loan is priced with an interest rate of Libor plus 225 basis points. Originally, the tranche was sized at $500 million with pricing of Libor plus 200 basis points but was reworked during syndication.

Mediacom's $1.15 billion credit facility (Ba3) - downsized from an original launch size of $1.3 billion - also contains a $400 million eight-year revolver that was reduced from $600 million and a $200 million eight-year term loan A. Both pro rata tranches are priced at Libor plus 150 basis points after a flex up during syndication from Libor plus 125 basis points.

JPMorgan and Bank of America are the lead banks on the deal, with JPMorgan listed on the left.

Proceeds will be used by the Middletown, N.Y., cable television company to refinance existing debt.

Levi falls on Dockers decision

Levi's floating-rate bank debt dropped by about one point on the bid side to 108½ and about half a point on the offer side to 1101/2, according to a fund manager, after the company revealed its decision to take the approximately $1.4 billion annual worldwide revenue generating Dockers business off the market.

The San Francisco-based marketer of brand name apparel admitted that it would be more valuable to build on the Dockers brand than to sell it, especially based on improved year-to-date business performance.

"When we began exploring the possible sale of the Dockers business, we said that this was a strategic choice for us and that we would only sell if we received what we believe is an appropriate offer, given the value and worldwide stature of the brand," said Phil Marineau, chief executive officer, in a company news release.

"There has been a high level of interest in the Dockers business by prospective buyers. After carefully considering the numerous sales offers and terms we received, and reflecting upon our improved financial performance this year, we have chosen to keep the Dockers business. We believe that we will create more value for LS&CO. and the Dockers brand by retaining the business and driving its continued development ourselves."

"Throughout 2004, we have strengthened our financial performance and competitiveness," said Jim Fogarty, chief financial officer, in the release. "The company's improving financial position, particularly our stronger cash flow and bottom line results, contributed to our strategic decision to retain the Dockers brand. During the first nine months of this fiscal year, we've generated $50 million in net income, managed a healthy 43.8% gross margin and reduced our net debt $100 million. We have a healthier base of business and a stronger balance sheet."

Boise cuts pricing on B

Boise Cascade LLC lowered pricing on its in-market $1.33 billion seven-year term loan B to Libor plus 225 basis points from Libor plus 250 basis points due to strong demand, according to a market source, who explained that the "order book was mammoth."

Also helping the matter was the pricing of $650 million of high-yield bonds on Friday at 12.5 basis points inside of price talk. The company sold $250 million of eight-year senior floating-rate notes at par to yield three-month Libor plus 287.5 basis points and $400 million of 10-year senior subordinated notes at par to yield 7 1/8%.

Although the $1.225 billion six-year term loan C was oversubscribed as well, pricing was left unchanged at Libor plus 225 basis points, the source added.

The B and the C loans, which were offered at par, were sold as a package, meaning that all commitments that came in were sold on a proportional basis.

Originally, the reason behind the 25 basis point variation in pricing between the term loan B and the term loan C had to do with a repayment provision. If the company sells the timberland assets, proceeds repay the term loan C in its entirety before going toward the term loan B, and there are plans to sell the assets, a source previously explained.

But, the book was so oversubscribed that the syndicate was able to line up pricing on the two tranches without making any changes to this repayment clause.

Boise Cascade LLC, a new company formed by Madison Dearborn Partners LLC that will be based in Boise, Idaho, is getting this new credit facility to acquire Boise Cascade Corp.'s paper, forest products and timberland assets for about $3.7 billion.

Under the timberland portion of the acquisition, Boise Cascade LLC will own or control about 2.3 million acres of timberland in the United States, 35,000 acres of eucalyptus plantation in Brazil, and a 16,000-acre cottonwood fiber farm near Wallula, Wash.

Also being acquired is Boise Building Solutions, a producer of plywood, lumber, particleboard and engineered wood products, and Boise Paper Solutions, a manufacturer of uncoated free sheet papers.

Boise's $2.905 billion credit facility (Ba3/BB), which launched Sept. 29, also contains a $350 million six-year revolver talked at Libor plus 225 basis points. The revolver has an undrawn fee of 50 basis points. Revolver commitments of $15 million get 75 basis points upfront.

JPMorgan and Lehman Brothers are joint lead arrangers on the loan, with JPMorgan listed on the left. Deutsche Bank and Goldman Sachs are agents.

CHI deadline hits, loan subscribed

CHI Overhead Doors Inc. was fully subscribed as Monday's commitment deadline came and went, according to a market source, who described investor interest on the deal as "surprisingly" strong, especially on the second-lien tranche.

The $145 million senior credit facility consists of a $20 million revolver with an interest rate of Libor plus 300 basis points, a $95 million first-lien term loan with an interest rate of Libor plus 350 basis points and a $30 million second-lien term loan with an interest rate of Libor plus 800 basis points.

UBS is the lead bank on the deal that will be used to help fund JLL Partners' leveraged buyout of the overhead garage door manufacturing company.

Jarden sets launch

Jarden Corp. has firmed down timing on the launch of its $1.05 billion senior secured credit facility (B1/B+), with a bank meeting scheduled for Thursday morning, according to a market source. Previously it was known that the deal would launch this week but a specific date had been unavailable.

Citigroup Global Markets and CIBC World Markets are joint lead arrangers and bookrunners on the deal, with Citigroup listed on the left.

CIBC is administrative agent, Citigroup is syndication agent, and Bank of America is documentation agent, according to an 8-K filed with the Securities and Exchange Commission in late-September.

The facility consists of an $850 million seven-year term loan B and a $200 million five-year revolver.

Proceeds will be used to refinance existing debt and help finance the acquisition of American Household Inc. for $745.6 million, including the assumption of debt. The company will also receive a $350 million equity contribution from Warburg Pincus to help fund the acquisition.

The acquisition is expected to close during the first quarter of 2005, subject to Hart-Scott-Rodino approval and other customary closing conditions.

Upon closing, total debt to adjusted EBITDA is anticipated to be around 3.75x.

Jarden is a Rye, N.Y., provider of niche consumer products. American Household is a Boca Raton, Fla., consumer products company that produces such brand names as BRK, Campingaz, Coleman, First Alert, Health o meter, Mr. Coffee, Oster and Sunbeam.

GGP sets retail launch

General Growth Properties established timing on its retail launch, scheduling a bank meeting for Wednesday for the $9.75 billion credit facility, according to a market source. Like Jarden, it was previously known that the deal could launch this week but a specific date was unavailable.

The deal already launched to senior managing agents and managing agents on Oct. 4.

The facility consists of a $250 million three-year revolver, a $3.9 billion three-year term loan A talked at Libor plus 225 to 250 basis points, a $2 billion four-year term loan B talked at Libor plus 250 to 275 basis points and a $3.6 billion bridge loan that will be taken out by CMBS deal.

Lehman Brothers, Credit Suisse First Boston, Wachovia and Bank of America are joint lead arrangers and joint bookrunners on the deal, with Lehman listed on the left.

Proceeds, along with $500 million of new equity, will be used to help fund the acquisition of The Rouse Co. for $7.2 billion, including the assumption of about $5.4 billion of Rouse debt, and to redo $2 billion of General Growth's unsecured credit.

The transaction is expected to close in the fourth quarter of 2004.

Post closing, General Growth, a Chicago-based shopping mall owner, will have about $23 billion of debt, or about 71% of total pro forma capitalization of $32.5 billion based upon the current stock price. Estimated interest coverage is about 1.6x for the first full year after closing, assuming the transaction closes in the fourth quarter.

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