Washington Group shifts funds; GGP softens repricing request; Brand Services, TravelCenters price talk

By Sara Rosenberg

New York, June 7 - Washington Group International Inc. has decided to shift some funds into its revolving tranche from its synthetic letter-of-credit facility while keeping the overall size of the facility the same and has lowered pricing on the synthetic piece.

Meanwhile, General Growth Properties Inc. did in fact launch a somewhat less aggressive repricing request during Tuesday's conference call, as some traders had guessed on Monday based on trading performance. Brand Services Inc. set opening price talk on its newly launched term loan C - opting to put the spread in line with existing term loan pricing - and TravelCenters of America set price talk on its refinancing deal.

Washington Group increased the size of its revolver on Tuesday to roughly $245 million to $250 million, while decreasing its synthetic letter-of-credit facility by the equivalent amount to a size of roughly $100 million to $105 million, according to a market source, who said that the revolver upsizing is a result of the tranche going so well in syndication. Both tranches were originally launched with a size of $175 million.

In addition, the syndicate took pricing on the five-year synthetic letter-of-credit facility down to Libor plus 175 basis points from original price talk of Libor plus 200 basis points, the source said. This tranche was marketed to institutional investors.

Pricing on the five-year revolver remained unchanged at Libor plus 200 basis points. The tranche contains a commitment fee of 50 basis points.

Credit Suisse First Boston is the sole lead arranger and bookrunner on the $350 million credit facility.

Proceeds from the new deal will be used to refinance the company's existing credit facility.

Washington Group is a Boise, Idaho, provider of design, engineering, construction, construction management, facilities and operations management, environmental remediation and mining services.

GGP seeks less intense spread cut

General Growth Properties asked lenders to reduce pricing on its $2 billion four-year term loan to Libor plus 200 basis points from Libor plus 225 basis points - a move that was somewhat anticipated by traders during Monday's session. Those traders had watched levels on the bank paper tread higher from the par bid, par ½ offered quotes seen Friday when the expectation was that with this second repricing attempt the company would once again gun for Libor plus 175 basis points pricing.

Although, the repricing proposal was softened, there was still some hostility from investors on the call, according to a market source.

There was "no call protection spoken of during the call. But, with some call protection they might get this done. Maybe with some call protection [lenders] will be less hostile," the source said.

This is the company's second try at lowering the rate on its massive term loan. In April, the company tried to amend the spread by approaching investors directly - a move that failed, resulting in the proposal being pulled from the market. However, now the company has retained Credit Suisse First Boston, Lehman Brothers, Wachovia and Bank of America to help get the deal done.

In trading Tuesday, the term loan was quoted at par 3/8 bid, par 5/8 offered, unchanged from Monday's closing levels, according to the market source, and up slightly at par ½ bid, par ¾ offered, according to a trader.

General Growth Properties is a Chicago-based regional shopping mall real estate investment trust.

Brand Services price talk

Brand Services decided to launch its $150 million seven-year senior secured term loan C (B2) Tuesday with opening price talk of Libor plus 325 basis points -same pricing as the company's existing term loan carries, according to a market source.

By comparison, according to a recent 8-K filed with the Securities and Exchange Commission, the company had hoped to price the tranche at Libor plus 275 basis points if it were rated in line or better and had the same outlook as the facilities under the existing credit agreement, and, in all other cases, at Libor plus 300 basis points

Credit Suisse First Boston and JPMorgan are joint lead arrangers and joint bookrunners on the deal, with CSFB the left lead. JPMorgan is also syndication agent.

The company is also looking to get a $35 million second-lien term loan (B3) due July 15, 2012.

Proceeds from the term loans will be used to fund the acquisition of the operating assets of the Aluma Systems group of companies for C$255 million. In addition to the new bank debt, JPMorgan Partners has provided a commitment of $30 million of equity financing to help fund the transaction as well.

Brand Services is a Chesterfield, Mo.-based provider of scaffolding services. Aluma is a Toronto-based provider of services to customers in the scaffolding and concrete construction industries.

TravelCenters sets opening spreads

TravelCenters of America announced opening pricing of Libor plus 225 basis points on its $125 million revolver and Libor plus 200 basis points on its $680 million term loan at its bank meeting Tuesday, according to a market source.

J.P. Morgan Securities Inc. and Lehman Brothers Inc. are joint bookrunners and co-lead arrangers on the $805 million senior secured credit facility (B1/BB).

Proceeds will be used to refinance outstanding borrowings under the company's existing senior secured credit facility and fund a tender offer for its 12¾% senior subordinated notes due 2009.

TravelCenters of America is a Westlake, Ohio, network of full-service travel centers and heavy truck repair facilities.

Delphi shifts funds, sets pricing

Delphi Corp. increased the size of its term loan B and decreased the size of its amended revolver, with the result being an increase in the overall credit facility size (B1/BB-/BB-) to $2.825 billion from 2.750 billion, according to a market source.

Furthermore, pricing on the term loan B firmed up and pricing on the revolver was flexed higher by 50 basis points, the source added.

More specifically, the term loan B was upsized to $1 billion from $750 million and pricing was set at Libor plus 650 basis points - the low end of recently revised pricing guidance of Libor plus 650 to 700 basis points but still higher than original price talk at launch of Libor plus 550 basis points.

The term loan B is non-callable for one year and then callable at 102 in year two and at 101 in year three. These call protection provisions were added to the deal around a week ago at the same time that price talk was modified higher.

The term loan is, and has been since launch, offered to investors at a discount of 991/2.

As for the revolver, this is the first time that the tranche has seen any changes since launching into syndication in May.

The revolver was downsized to $1.825 billion from $2 billion but is still adding liquidity to the company's balance sheet being that the existing revolver is only sized at $1.5 billion.

In addition, pricing on the revolver, which is grid based, was increased to start at Libor plus 500 basis points compared to original talk at launch of Libor plus 450 basis points, the source said.

The deal has been labeled one to watch since news of it first hit the market, especially given the recent outpouring of negative news in the auto sector- such as General Motors Corp. and Ford Motor Co. being downgraded to junk status and Collins & Aikman Corp. filing for Chapter 11 bankruptcy protection because of liquidity problems.

Investors were a little concerned over Delphi's collateral package, paying close attention to whether they're covered in a worst-case scenario. Some were wary of the fact that the company is trying to raise $750 million in term debt because they need liquidity and that the deal is secured by GM receivables and inventory - given GM's downgrade and liquidity issues.

In addition some had thought that the original price talk on the term loan was too light - a concern that the syndicate obviously addressed with its changes to spreads.

Proceeds from the new credit facility will be used to refinance the company's existing credit facility that totals $3 billion.

JPMorgan and Citigroup are joint lead arrangers on the deal, with JPMorgan the left lead.

Delphi is a Troy, Mich., supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers.

Rexair well attended

Rexair Inc.'s Tuesday morning bank meeting was well attended, according to a market source, and although early commitments have not yet started coming in, investors seemed to be pleased with the company story.

"I think people like the historical stability of earnings, the sales model and the high free cash flow," the source explained.

The $144 million credit facility (B1/expected B) consists of a $124 million five-year term loan B and a $20 million five-year revolver, with both tranches talked at Libor plus 325 basis points.

The term loan is being offered to investors at par while revolver commitments of $10 million get an upfront fee of 75 basis points.

Credit Suisse First Boston is the sole lead arranger on the deal that will be used to fund Rhone Capital LLC's acquisition of the company from Jacuzzi Brands Inc. for about $170 million.

The acquisition, which is subject to financing, antitrust approval and other customary closing conditions, is expected to close by July 2.

Following completion of the acquisition, Jacuzzi will retain a 30% interest in Rexair.

Rexair is a Troy, Mich.-based manufacturer of the Rainbow vacuum cleaner system for the global direct sales market.

Qwest heads lower

Qwest Communications International Inc.'s term loan was down by about half a point Tuesday "with the bonds" after the company announced plans to sell new debt and purchase existing debt, according to a trader.

The bank debt was quoted at 99 bid, 99½ offered, the trader added.

On Tuesday, the Denver-based communications company said that it would sell in a private offering $1.25 billion of new QCII and QC senior notes and would use the proceeds to purchase for cash up to $904 million total principal amount of specified series of outstanding debt securities, including 13% senior subordinated secured notes due 2007, 6 5/8% notes due 2005 and 6 1/8% notes due 2005.

Qwest also said that Qwest Capital Funding Inc. has a maturity of $179 million of 6¼% notes due on July 15 and that it has the ability to prepay any portion or all of its $1.25 billion term loan due in 2007 after June 9.

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