Springs Industries, Cosmetic Essence break; NRG sees strong demand with loan twice oversubscribed

By Sara Rosenberg

New York, Dec. 3 - Springs Industries Inc. and Cosmetic Essence Inc. allocated and broke for trading on Friday, with both deals' institutional paper quoted around the 101 context. Meanwhile, in the primary, NRG Energy Inc.'s credit facility is already about two times oversubscribed as orders have been flooding in over the past couple of days.

Springs Industries' term loan B was quoted at par ¾ bid, 101¼ offered on the open and then headed up to 101 bid, 101½ offered where it pretty much settled for the rest of the session, according to a market source.

Allocations on this deal were decent as a source admitted to getting just over 50% of what he put in for. "Given the way things are going I would say that's pretty good," the source added about his allocation.

Springs' $290 million six-year term loan B is priced with an interest rate of Libor plus 275 basis points. The tranche was reverse flexed from Libor plus 325 basis points during syndication.

The $490 million credit facility (Ba3) also contains a $150 million five-year revolver and a $50 million five-year term loan A also priced with an interest rate of Libor plus 275 basis points.

JPMorgan and Wachovia are the lead banks on the refinancing deal, with JPMorgan the left lead.

Springs Industries is a Fort Mill, S.C., home furnishings manufacturer and marketer.

Cosmetic Essence breaks

Cosmetic Essence's $97.5 million six-year first-lien term loan was quoted at 101 bid on the break and pretty much stayed at that level throughout the session, according to a fund manager.

Allocations on the term loan were OK, with one source saying that he received about 30% of what he put in for.

The term loan, which was upsized from $90 million earlier in the week, is priced with an interest rate of Libor plus 275 basis points. Original price talk on the term loan had been Libor plus 325 basis points.

Cosmetic Essence's facility also contains a $28.5 million seven-year second-lien term loan (downsized from $36 million) with an interest rate of Libor plus 650 basis points (reverse flexed from Libor plus 700 basis points) and a $25 million six-year revolver with an interest rate of Libor plus 275 basis points (reverse flexed from Libor plus 325 basis points).

BNP Paribas is the lead bank on the deal that will be used to fund Onex Partners LP's acquisition of Cosmetic Essence from Brockway Moran & Partners Inc. in a transaction valued at about $300 million.

Cosmetic Essence is a Holmdel, N.J., contract manufacturer for the personal care products industry.

NRG oversubscribed

NRG's $950 million credit facility is already oversubscribed - almost a week before the actual commitment deadline - with more than $1.6 billion in the book by Friday afternoon, according to a market source.

The facility consists of a $450 million seven-year term loan B talked at Libor plus 250 basis points, a $350 million seven-year synthetic letter-of-credit facility talked at Libor plus 250 basis points and a $150 million three-year revolver talked at Libor plus 275 basis points with a 50 basis point commitment fee.

Commitments are due on Dec. 9.

Some had speculated that the deal could go the way of a blowout as more than 80 people attended Tuesday's bank meeting in person and more than 80 people attended via telephone. And, commitments on the institutional portion of the deal had started to flow in immediately following the launch.

Credit Suisse First Boston and Goldman Sachs are the lead banks on the refinancing deal, with CSFB the left lead.

NRG is a Minneapolis wholesale power generation company.

Scientific Games revolver orders to get first priority

Scientific Games Corp. is marketing its $100 million term loan primarily to banks and funds that commit to the $200 million revolver, a market source told Prospect News, as the company is reducing its term debt by close to $400 million through this new deal and increasing its revolver by $125 million.

Furthermore, there have already been early commitments coming in to the deal, and the company's existing revolver group, which is about eight or nine strong, has expressed interest in continuing to participate in the company's bank group, the source added.

Both the term loan and the revolver are talked at Libor plus 200 basis points. The term loan is being offered at par, and the revolver has a $15 million tier with an upfront fee of 75 basis points and a $10 million tier with an upfront fee of 50 basis points.

Commitments are due Dec. 15.

There is also an uncommitted $100 million term loan greenshoe provision in the credit agreement. This incremental bank debt would be available post closing, if needed, primarily for general corporate purposes.

A portion of the borrowings under the proposed facility would be used to repay a portion of the current outstanding term loan debt D (which was $459.354 million at Sept. 30), but the company is also planning on tapping the high-yield market with a $200 million senior subordinated notes offering to repay a portion of the existing term loan debt outstanding and to finance a tender offer for its 12½% senior subordinated notes due 2010. Furthermore, the company priced $250 million 0.75% convertible senior subordinated debentures this week with proceeds earmarked for existing term debt repayment as well.

JPMorgan and Bear Stearns are joint bookrunners on the five-year senior secured credit facility.

Security for the credit facility is substantially all of the assets of Scientific Games and its wholly owned domestic subsidiaries, including stock and other equity interests.

Scientific Games is a New York-based provider of services, systems and products to both the instant ticket lottery industry and the pari-mutuel wagering industry.

International Mill nets orders

International Mill Service Inc.'s $180 million in incremental bank debt (B+) has already gotten early commitments and appears to be "going very well," according to a market source, as some existing lenders - the only group approached for this deal - have agreed to upsize their positions.

The deal went out to the existing lending group on Wednesday, and the commitment deadline is set for Dec. 14.

Through an amendment and restatement, the company is looking to basically double its facility size, by getting a $140 million in add-on term loan B debt at Libor plus 275 basis points, which would bring the total B loan to $265 million, a $20 million in add-on second-lien term loan debt at Libor plus 600 basis points, which would bring the total second-lien size to $50 million, and a $20 million in add-on revolver debt at Libor plus 275 basis points, which would bring the total revolver size to $45 million.

Pricing on the add-on bank debt is in line with pricing on the existing bank debt.

The first- and second-lien term loan are being offered at par and the new money fee for revolver commitments is 75 basis points.

Bear Stearns and UBS are the lead banks on the deal, with Bear Stearns the left lead.

Proceeds from the additional bank debt will be used to help fund the acquisition of Glassport, Pa.-based Tube City Holdings LLC, a provider of specialty services to the global steel industry.

International Mill Service is a Horsham, Pa.-based provider of specialty services to the North American steel industry. The company closed on its credit facility about a month ago in connection with its acquisition by Wellspring Capital Management LLC.

Rockwood closing Dec. 6 week

Rockwood Specialties Group Inc.'s U.S. term loan B repricing is targeted to close during the Dec. 6 week now that a previously rumored tweak was made in which the repricing proposal was changed to Libor plus 225 basis points instead of Libor plus 200 basis points, according to a market source.

Currently, the term loan is priced at Libor plus 250 basis points.

The 101 soft call protection against refinancings/repricings, which was added to the deal shortly after launch, remained in place.

Goldman Sachs and UBS are the lead banks on the repricing, with Goldman the left lead.

Rockwood is a Princeton, N.J., specialty chemicals and advanced materials company.

Cox closes

Cox Communications, Inc. said Friday that it closed on a new $6.5 billion credit facility (Baa3) on Thursday.

The loan was made up of a five-year unsecured $1.5 billion revolving credit facility, a five-year unsecured $2.0 billion term loan and an 18-month unsecured $3.0 billion term loan.

Cox also amended and restated its existing credit agreement consisting of a $1.25 billion revolver due June 4, 2009 to match the new facility.

Cox said it will draw $6.9 billion on the facilities to fund the tender offer for Cox Communications' class A common shares.

Citigroup, JPMorgan and Lehman Brothers are joint lead arrangers and joint bookrunners, with Citigroup as left lead, JPMorgan Chase Bank as administrative agent and Citicorp North America Inc. and Lehman Commercial Paper Inc. syndication agents.

Cox Communications is an Atlanta cable company.

Stratos closes

In follow-up news, Stratos Global Corp. said it closed on its new $175 million credit facility (Ba2/BB-).

The loan consists of a $150 million six-year term loan B priced at Libor plus 225 basis points and a five-year $25 million revolving credit facility that will be undrawn at closing. The term loan B was increased from a planned $125 million size.

RBC Capital Markets and Banc of America Securities were joint leads on the deal.

"This new debt facility allows Stratos to take advantage of the current favorable capital market conditions, and it provides greater flexibility as we evaluate the most effective strategies to enhance value for our shareholders," said Jim Parm, Stratos' president and chief executive officer, in a news release.

The Bethesda, Md.-based remote communication solutions provider will use proceeds from the term loan to repay its existing bank facility.

United Online closes

Also closing Friday was United Online Inc.'s new $150 million term B (B1/B+).

The company can borrow between $100 and $150 million to fund a modified Dutch auction tender offer for its outstanding common stock and for general corporate purposes.

Interest is at Libor plus 350 basis points.

The loan amortizes by $35 million in years one, two and three and $45 million in year four.

Deutsche Bank Trust Co. Americas is administrative agent and Deutsche Bank Securities Inc. is lead arranger.

United Online is a Woodland Hills, Calif., provider of consumer internet subscription services.

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