Mosaic B loan breaks around 101; Oriental Trading restructures second-lien loan proposal

By Sara Rosenberg

New York, Feb. 15 - The Mosaic Co.'s $850 million credit facility (Ba2/BB+) freed up for trading on Tuesday with the term loan B straddling the 101 area. On the primary side, Oriental Trading Co. changed its second-lien proposal to a full blown refinancing with lower pricing and a lender fee, as opposed to a repricing and add-on deal.

Mosaic's $350 million seven-year term loan B was relatively active in its first day of trading with levels closing out the day around par 7/8 bid, 101 3/8 offered, according to a trader.

The tranche, which was originally anticipated to be sized at $400 million, is priced with an interest rate of Libor plus 150 basis points, down from original price talk of Libor plus 175 basis points.

Mosaic's facility also contains a $450 million revolver (up from an originally anticipated size of $400 million) and a $50 million term loan A. Both tranches are priced with an interest rate of Libor plus 125 basis points.

JPMorgan and BNP Paribas are the lead banks on the refinancing deal.

Mosaic is a Minnetonka, Minn., producer and marketer of concentrated phosphate and potash crop nutrients.

Oriental Trading changes second-lien

Oriental Trading reworked its second-lien term loan (B3/B-) proposal, switching it to a complete refinancing with a new $122 million six-year second-lien tranche as opposed to repricing the existing $80 million second-lien term loan and adding $42 million in additional second-lien debt on top of that, according to a market source.

Furthermore, pricing on the new second-lien term loan was set at Libor plus 475 basis points, whereas on the existing and add-on pieces under the original proposal pricing was going to be set at Libor plus 550 basis points, the source said.

However, potential second-lien lenders are not expected to mind the decrease in spread because they are being compensated with a 200 basis points fee.

Under the original proposal, existing lenders would have missed out on the 102 call protection that was contained in the existing second-lien credit agreement since the call protection would have only kicked in if the tranche was actually being taken out.

"[They] will not have any issue at this level," the source added regarding the revised pricing.

The changes to the second-lien term loan were made on Monday night and were posted on Intralinks on Tuesday.

Oriental Trading is also looking to add $30 million of new term loan B debt onto its $257 million five-year term loan B, and reprice the entire tranche (B1/B+) at Libor plus 250 basis points.

No changes were made to the term loan B proposal so far, according to a buy-side source, but "pricing will probably come down another 25 basis points or they'll add a grid because it was oversubscribed," the source speculated.

In addition to the term loan changes, the company is looking to reprice its $40 million five-year revolver (B1/B+) at Libor plus 250 basis points. The revolver carries a 50 basis points commitment fee.

Credit Suisse First Boston and BNP Paribas are joint lead arrangers on the deal, with CSFB left lead on the second-lien and BNP left lead on the term loan B.

The additional bank debt will be used to fund a dividend to shareholders.

Oriental Trading is an Omaha, Neb., direct marketer of novelties, toys, party supplies, crafts, gift items, home décor products and garden accents.

Primus tweaks fill book

Primus Telecommunications Group Inc. over-filled the book for its $100 million senior secured term loan (B3/B-) by Monday afternoon's commitment deadline, with the new found momentum sparked by modified pricing and covenants, according to a market source.

The term loan is now priced at Libor plus 650 basis points, flexed up from the Libor plus 550 basis points price talk.

Furthermore, call protection was changed to non-callable for the first year, callable at 103 in the second year, callable at 102 in the third year and callable at 101 in the fourth year. Original call protection was 102 in both year one and two.

Also, some covenants were reworked a bit and a secured debt incurrence test was added to the credit agreement, the source said.

Allocations are hoped to go out later this week, the source added.

When the deal first launch at the end of January, the syndicate had set a commitment deadline date for Feb. 4 but the date was extended to get the deal done.

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

Fidelity National nets pro rata orders

Fidelity National Information Services Inc. (FIS), a subsidiary of Fidelity Financial Inc. (FNF), has already gotten in about four or five tickets on its pro rata bank debt since the senior managing agent meeting took place on Feb. 2 and the term loan B launch, which took place on Tuesday, was said to have gone well with good investor interest, according to a market source.

The $400 million revolver and the $1 billion term loan A are talked at Libor plus 175 basis points, and the $1.8 billion term loan B is talked at Libor plus 200 basis points, the source added.

Bank of America, JP Morgan Chase, Wachovia, Deutsche Bank and Bear Stearns are the lead banks on the $3.2 billion senior credit facility (Ba3/BB/BB-).

Proceeds from the two term loans will be used to help fund the recapitalization of the company. In late December 2004, the company entered into a stock purchase agreement under which it would sell an approximately 25% minority equity interest in its common stock to an investment group led by Thomas H. Lee Partners LP and Texas Pacific Group for a total purchase price of approximately $500 million.

The revolver is expected to be undrawn at closing.

FIS is a Jacksonville, Fla., provider of technology solutions, processing services and information services to the financial services and real estate industries.

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