MD Beauty term B breaks in the upper par area; Select Medical B loan bounces around in the 101s

By Sara Rosenberg

New York, Feb. 22 - MD Beauty Inc. allocated its $224.5 million credit facility Tuesday afternoon with its first-lien loan quoted in the upper par context and its second-lien loan quoted in the upper 101 context after freeing up for trading. Also allocating on Tuesday was Select Medical Corp. with its institutional term loan trading as high as the mid-101 area before settling back down to the lower 101 context.

Following the break and basically until day's end, MD Beauty's $155 million seven-year first-lien term loan (B2/B) was trading in the mid-to-high par range and the $54.5 million eight-year second-lien term loan (B3/CCC+) was trading in the mid-to-high 101 range, according to a trader, who added that overall trading volume in the deal was relatively light.

According to a buyside source, the first lien was quoted at par ¾ bid, 101¼ offered by the end of the session and the second-lien was quoted at 101¼ bid, 101¾ offered.

The first-lien term loan, which was upsized from $150 million during syndication, is priced with an interest rate of Libor plus 325 basis points, the low end of original price talk that ranged from Libor plus 325 to 350 basis points.

The second-lien term loan, which was downsized from $57 million during syndication, is priced with an interest rate of Libor plus 650 basis points.

"Allocations were OK," the buyside source said. "As expected with every deal these days you get about half of what you put in for if you're lucky."

MD Beauty's facility also contains a $15 million six-year revolver (B2/B) with an interest rate of Libor plus 325 basis points.

BNP Paribas is the lead bank on the deal.

Proceeds from the credit facility were used for a dividend recapitalization that was completed Tuesday.

This is the second recapitalization in less than a year of the company. In June 2004 Berkshire Partners and JH Partners together led a recapitalization in which both firms made substantial equity investments and which made Berkshire Partners an equal partner with long-time investor JH Partners.

As part of this newly completed recapitalization, both firms returned to their investors 100% of the capital invested in the June transaction.

MD Beauty is a San Francisco personal care company.

Select Medical breaks

Select Medical's $580 million seven-year term loan B broke for trading Tuesday morning with levels around par 7/8 bid, 101 1/8 offered, according to a trader. The paper then moved up to trade as high as 101 3/8 bid, 101 5/8 offered before settling back down by the end of the day at 101 bid, 101½ offered, the trader said.

The tranche is priced with an interest rate of Libor plus 175 basis points after reverse flexing from Libor plus 225 basis points during syndication.

Select Medical's $880 million senior secured credit facility (B1/BB-) also contains a $300 million six-year revolver with an interest rate of Libor plus 250 basis points that was left unchanged throughout the syndication process. The revolver has a commitment fee of 50 basis points.

JPMorgan and Wachovia are joint lead arrangers and joint bookrunners on the deal, JPMorgan Chase Bank is administrative agent and collateral agent, Wachovia Bank is syndication agent, and Merrill Lynch Capital Corp. is documentation agent.

Proceeds from the term loan, in combination with up to $200 million in revolver borrowings, equity contributions and senior subordinated notes, will be used to fund EGL Holding Corp.'s approximately $2.3 billion acquisition of Select Medical, to repay the existing credit facility and to repurchase existing subordinated notes tendered.

EGL is a new company formed by an investment group led by Welsh, Carson, Anderson & Stowe for the Select Medical acquisition.

Select Medical is a Mechanicsburg, Pa., operator of specialty hospitals.

Hexcel cuts pricing

Hexcel Corp. reverse flexed pricing on its $225 million seven-year term loan B to Libor plus 175 basis points from Libor plus 200 basis points as the tranche was somewhere around six to seven times oversubscribed, according to a market source.

The change in pricing was announced Friday afternoon, the source added.

Deutsche Bank and Bank of America are the lead banks on the Stamford, Conn., structural materials company's deal.

The $350 million senior secured credit facility (B2/B+) also contains a $125 million five-year revolver with a pricing grid.

Hexcel is getting this new credit facility in connection with its tender offer for the $125 million 9.875% senior secured notes due 2008. The tender offer will expire on Feb. 28.

Mosaic closes

The Mosaic Co. closed on its new $850 million senior secured credit facility (Ba2/BB+) consisting of a $450 million revolver with an interest rate of Libor plus 125 basis points, a $350 million term loan B with an interest rate of Libor plus 150 basis points and a $50 million term loan A with an interest rate of Libor pus 125 basis points, according to a company news release.

JPMorgan and BNP Paribas acted as co-lead arrangers on the deal. JPMorgan was sole bookrunner and is administrative agent as well.

Mosaic Co. is the borrower under the revolver, Mosaic Global Holdings Inc. is the borrower under the term loan B and Mosaic Potash Colonsay ULC is the borrower under the term loan A.

Proceeds are being used to repay Mosaic Global Holding's prior term loan B (about $250 million outstanding) plus the outstanding amounts under Mosaic Global Holding's $210 million revolver, the outstanding amounts under The Mosaic Co.'s $160 million interim credit agreement, the payment of fees and for general corporate purposes.

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

Las Vegas Sands closes

Las Vegas Sands Inc./Venetian Casino Resort LLC closed on its $1.62 billion amended and restated senior secured credit facility (B1/BB-), consisting of a $970 million term loan B, a $200 million delayed-draw term loan and a $450 million revolver. All three tranches are priced at Libor plus 175 basis points.

Goldman Sachs and The Bank of Nova Scotia were the lead banks on the deal, with Goldman the left lead.

Proceeds from the term loan debt, along with proceeds from a $250 million senior notes offering and cash on hand, were used to retire the outstanding 11% mortgage notes due 2010 of Las Vegas Sands Inc. and Venetian Casino Resort and refinance existing term loan debt.

Proceeds from the remainder of the amended and restated facility will be used to finance a portion of the design, development, construction and pre-opening costs of the Palazzo Casino Resort, and for general corporate purposes.

Las Vegas Sands is a Las Vegas hotel, gaming, resort and exhibition/convention company.

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