Masonite nets early interest, revolver price talk emerges; Telcordia breaks in the 101 plus area

By Sara Rosenberg

New York, March 4 - Masonite International Corp.'s $1.525 billion credit facility (B2/BB-) has received investor interest ahead of Monday's launch even though price talk on the term loan has yet to come out and may not come out until after the actual bank meeting. However, price talk on the revolver was released on Friday.

In the secondary, Telcordia Technologies inc. allocated its credit facility on Friday, with the term loan B opening for trading around 3 p.m. ET in the mid-to-high 101 context.

Masonite's credit facility consists of a $350 million revolver and a $1.175 billion term loan B. Price talk on the revolver is currently Libor plus 250 basis points, while price talk on the term loan is still to be determined, according to a market source.

"There has been a significant amount of interest," the source said. "People are really looking forward to this. They are an existing institutional issuer. KKR is putting in a boat load of equity. It's a nice company - easy to understand. I think it will go very well."

Masonite was previously scheduled to hold the bank meeting during the week of Feb. 14 but a decision was made to cancel the launch because shareholders were expected to turn down Kohlberg Kravis Roberts & Co.'s leveraged buyout proposal at a Feb. 18 shareholders meeting. The opposition to the acquisition basically said that the original offer undervalued the company.

Later that week, though, KKR announced that it increased its bid for Masonite to C$42.25 per share in cash from C$40.20 per share in cash, and, in light of the change, Masonite rescheduled its shareholders meeting to March 31 from Feb. 18.

The additional funds needed by KKR to complete the pricier-than-originally anticipated LBO will be coming from equity, which is why the size of the credit facility and the proposed $825 million bond offering were left unchanged from original sizes.

The Bank of Nova Scotia and Deutsche Bank are co-lead arrangers on the credit facility, Deutsche and UBS Securities are co-syndication agents, and SunTrust and Bank of Montreal are agents.

Masonite International is a Mississauga, Ont.-based building products company.

Telcordia B loan at 101 plus

Telcordia's $570 million term loan B broke for trading late Friday with opening levels around 101¼ bid, 101½ offered and then quickly moved up to 101½ bid, 101¾ offered during the session, according to a trader.

The tranche, which was upsized from $520 million after a bond deal was downsized by the equivalent amount, is priced with an interest rate of Libor plus 200 basis points. Pricing on the term loan B came in from original talk of Libor plus 250 basis points earlier this week.

Telcordia's facility also contains a $100 million revolver with an interest rate of Libor plus 250 basis points.

Proceeds from the $670 million credit facility (B1/B+) and the $300 million senior subordinated notes due 2013 will be used to help fund the leveraged buyout of the company by Providence Equity Partners and Warburg Pincus for $1.35 billion in cash.

JPMorgan, Bear Stearns, Deutsche and Lehman are lead banks on the credit facility, with JPMorgan the left lead.

Telcordia is a Piscataway, N.J, provider of telecommunications software and services for IP, wireline, wireless and cable.

FIS shifts funds

Fidelity National Information Services Inc. (FIS), a subsidiary of Fidelity Financial Inc., moved $200 million from its term loan A into its term loan B and then cut pricing on the upsized institutional term loan by 25 basis points.

The term loan is now sized at $800 million, down from $1 billion, and the term loan B is now sized at $2 billion, up from $1.8 billion, a market source said.

Pricing on the term loan B came down to Libor plus 175 basis points from Libor plus 200 basis points, the source added.

Pricing on the downsized term loan A and the $400 million revolver (size left unchanged) remained at Libor plus 175 basis points.

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 about $500 million.

The revolver is expected to be undrawn at closing.

Fidelity National Information Services 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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