MetroPCS firms up downsized structure; secondary sees $87 million portfolio auctioned off

By Sara Rosenberg

New York, May 20 - MetroPCS Wireless Inc. finalized the structure on its downsized $750 million credit facility as the syndicate is gearing up to allocate and officially close the deal in the May 23 week.

Meanwhile, in the secondary, there was an auction for a portfolio of par names earlier in the session that grabbed the attention of some market players.

MetroPCS posted documents Friday with a new structure for its credit facility, which included downsizing the overall deal by $200 million, increasing pricing and modifying call protection provisions.

The first-lien term loan was reduced to $500 million from $700 million and pricing on the tranche was increased to Libor plus 450 basis points from opening price talk at launch of Libor plus 375 basis points, according to a market source.

Last week, the tenor of the term loan was changed to six years from seven years and rumor had it that pricing was going to go up to around the Libor plus 425 basis points area, but no official spread change had been announced until now.

Furthermore, call protection on the first-lien term loan was changed to 103 in year one, 102 in year two and 101 in year three from the original proposal that called for protection of 102 in year one and 101 in year two.

Also, a $50 million greenshoe was added to the first-lien term loan, but it is only available after MetroPCS' audited financials are release.

As for the $250 million seven-year second-lien term loan, the size of the tranche was left unchanged, but pricing went up to Libor plus 700 basis points from opening price talk at launch of Libor plus 575 basis points, the source said.

Last week, price talk on the second-lien was rumored to be heading higher, with speculation being that the deal will come around the Libor plus 625 basis points context - although, once again, no official word on the flex had come out until now.

Call protection on the second-lien term loan is non-callable for two years, then at 102 in year three and 101 in year four. This was changed a week ago from original terms calling for protection of 102 in year one and 101 in year two.

A greenshoe was added to the second-lien term loan as well, although this one is sized at $100 million, and like the first-lien greenshoe, it is only available after MetroPCS' audited financials are release.

Another modification to the deal that was made during syndication was that a leverage covenant will be added to the credit agreement of maximum 5x leverage through the first lien, a buyside source said.

Books have closed on the two term loans as the deal is now fully circled, the market source added.

The $750 million senior secured credit facility is unrated at this time because financial statements are unavailable, but as a reference spot, the senior unsecured notes at the holding company level are rated B3, and this credit facility is a secured deal at the operating company level.

Bear Stearns is the sole lead arranger and bookrunner on the deal that will be used to fund a tender offer for MetroPCS Inc.'s $150 million 10¾% senior notes due 2011 and refinance $540 million of existing debt, with remaining proceeds going toward cash on the balance sheet for build-out and corporate uses.

With the downsizing, the use of proceeds for this deal was not significantly changed since the debt refinancings are still going to take place. The only modification is that the amount of cash that is going toward the balance sheet will be less than was originally proposed, the source concluded.

MetroPCS Wireless is a Dallas-based provider of wireless communications services.

Portfolio auction nabs focus

An auction went off Friday morning in which an $87 million portfolio of par names was sold off, stealing attention from secondary loan market participants, according to a trader,

Bank of America walked away the winner of the portfolio, the trader added.

Trump closes

Trump Hotels & Casino Resorts Inc. closed on its new $500 million credit facility (B2/BB-) as the company announced its exit from Chapter 11 on Friday. Morgan Stanley and UBS acted as joint lead arrangers on the deal.

The facility consists of a $200 million revolver with an interest rate of Libor plus 250 basis points, a $150 million delayed-draw term loan with an interest rate of Libor plus 250 basis points and a step down to Libor plus 225 basis points dependent on a rating upgrade, and a $150 million term loan B with an interest rate of Libor plus 250 basis points and a step down to Libor plus 225 basis points dependent on a rating upgrade.

The step downs contained in the delayed-draw and term loan B tranches were added during syndication.

Security is a first-priority lien on substantially all of the company's assets.

The term loan B was used to fund payments under the company's reorganization plan. Borrowings from the rest of the facility will be available to refurbish and expand the company's current properties and allow it to enter into new and emerging markets. The delayed-draw loan is earmarked for the construction of a new hotel tower at the Trump Taj Mahal Casino Resort in Atlantic City, N.J.

With the bankruptcy emergence the Atlantic City, N.J., hotel and casino owner and operator has changed its name to Trump Entertainment Resorts Inc.

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