DynCorp, Oreck term loan B's start trading in the 101s; Primus book starting to build

By Sara Rosenberg

New York, Feb. 1 - DynCorp International LLC and Oreck Corp. allocated their credit facilities on Tuesday, with both deals' institutional tranches quoted in the plus 101 context. On the primary side of things, Primus Telecommunications Group Inc. has gotten some orders in for its term loan, but it's still wait-and-see as to whether the book will be filled by the commitment deadline.

DynCorp's $345 million term loan B was actively trading during Tuesday's session with the paper quoted at 101 1/8 bid, 101 3/8 offered by one trader and slightly higher at 101¼ bid, 101½ offered by a second trader. The tranche was originally issued to investors at par.

As for allocations, "they were OK given that the deal was three times oversubscribed," a buyside source said.

The term loan B is priced with an interest rate of Libor plus 275 basis points -the high end of original price talk that was set at Libor plus 250 to 275 basis points.

DynCorp's $420 million credit facility (B2/B+) also contains a $75 million revolver with an interest rate of Libor plus 250 basis points.

Upfront fees on the revolver were 125 basis points for a $25 million commitment, 75 basis points for a $15 million commitment and 50 basis points for a $10 million commitment.

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

Proceeds from the credit facility and a bond offering will be used to help fund Veritas Capital's acquisition of DynCorp from Computer Sciences Corp. for $850 million, with $775 million in cash payable at closing plus $75 million of senior preferred stock. The acquisition is expected to be completed in the first quarter of 2005.

The company is a Fort Worth, Texas, provider of mission critical support to its customers, primarily the U.S. government.

Oreck breaks

Oreck allocated its $215 million credit facility (B1/B+) late Tuesday, with the term loan B quoted at 101 3/8 bid, 101½ offered by one market source and 101 1/8 bid, 101 5/8 offered by another market source. The tranche was originally issued to investors at par.

Although the deal broke toward the end of the day, about $50 million of the paper traded, with a lot of the activity attributed to investor cleanup - meaning that since the deal was oversubscribed some investors opted to sell their relatively small positions while others opted to buy more paper to increase their positions.

The $195 million seven-year term loan B is priced with an interest rate of Libor plus 275 basis points. Originally, the tranche was sized at $190 million and priced at Libor plus 300 basis points, but the size was increased to allow for an increase in the dividend payment to sponsor American Securities Capital Partners and pricing was reduced due to strong oversubscription.

Oreck's facility also contains a $20 million six-year revolver that is priced with an interest rate of Libor plus 275 basis points after reverse flexing from Libor plus 300 basis points as well. The revolver has a 50 basis point unused fee and was originally issued with 50 basis points upfront for any size commitment.

The dividend payment to American Securities totals $69.9 million, with the breakdown being $65.5 million from term loan proceeds (up from $60.5 million), $2.5 million from cash on hand and $1.9 million from a loan amortization payment that was made in December but is being reimbursed because of this new deal.

Based on a last-12-month number through December, pro forma for the refinancing, senior and total leverage will be 3.63x compared to 3.58x when the deal first launched due to the term loan upsizing.

Royal Bank of Scotland is the lead bank on the New Orleans vacuum company's deal that will be used, in addition to paying a dividend, to refinance the existing credit facility.

Primus gets some orders

Primus Telecommunications has gotten a few commitments since launching at the end of last week, although whether the book will be filled by Friday's deadline remains to be seen, according to a market source.

It's only a couple of days in so it's hard to tell. [People] are waiting on the ratings. They should come out today or tomorrow," the source said.

"It's bond style. Credit agreement will read very much like their indentures. Mostly incurrence type covenants. No financial covenants. The last time [Lehman] did this kind of deal was Triton and there were so many orders in even before the bank meeting that the books had to be shut down early. Here it's only being offered as a private deal so public guys couldn't listen to the call or see it on Intralinks. As a result if you're in the bonds, you're probably not involved in this deal so it takes a little longer since it's new guys, not seasoned guys," the source explained.

In November, Lehman completed a $250 million five-year senior secured term loan (B2/B) with an interest rate of Libor plus 325 basis points for Triton PCS Inc., a Berwyn, Pa., wireless phone service provider. The term loan had originally come to market with opening price talk of Libor plus 350 to 375 basis points but was so oversubscribed that pricing came down during syndication.

Primus's $100 million senior secured term loan was launched last Friday with opening price talk of Libor plus 550 basis points.

Lehman Brothers is the sole lead bank on the McLean, Va., telecommunications company's deal. The deal will be used for general corporate purposes including the accelerated implementation of new product initiatives and potential repurchases of outstanding debt.

Alaska Communications closes

Alaska Communications Systems Group Inc. closed on its new $380 million senior credit facility (B1/B+) consisting of a $45 million revolver and a $335 million term loan B with an interest rate of Libor plus 200 basis points.

CIBC and JPMorgan were the lead banks on the deal, with CIBC the left lead.

Proceeds are being used to repay the existing senior secured credit facility and repurchase 9 7/8% and 9 3/8% notes. The previous credit facility generally bore interest at an annual rate of Libor plus 325 basis points.

Alaska Communications is an Anchorage, Alaska, communications provider.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.