La Paloma slashes spreads; Huntsman cuts deal size and pricing; Genoa hits secondary

By Sara Rosenberg

New York, Aug. 4 - La Paloma Generating Co. LLC reverse flexed pricing on all its first-lien tranches, aside from its revolver, and on its second-lien term loan. Also in the price cutting mood, Huntsman International LLC reverse flexed the spread on its massive institutional U.S. term loan Thursday, while tweaking tranche sizes as well.

In the secondary, Genoa Healthcare's new deal allocated and freed up for trading, with the first-lien term loan trading atop 101 and the second-lien term loan trading atop 102.

La Paloma reduced pricing on its first-lien institutional tranches while adding soft call protection and also reduced pricing on its second-lien term loan as the entire deal was highly oversubscribed, according to a market source.

Furthermore, the syndicate decided to accelerate the commitment deadline, giving investors until noon Friday to put in orders, which is when the books will be closing, as opposed to the original deadline of Aug. 10, the source said.

More specifically, pricing on the $40 million pre-funded letter-of-credit facility (Ba3/BB-), the $244 million first-lien term loan (Ba3/BB-) and the $21 million delayed-draw first-lien term loan (Ba3/BB-) was reverse flexed to Libor plus 175 basis points from original price talk at launch of Libor plus 225 basis points, and soft call protection of 101 for one year was added to all three of these first-lien tranches.

Meanwhile, pricing on the $171 million second-lien term loan (B2/B) was reverse flexed to Libor plus 350 basis points from original price talk at launch of Libor plus 400 basis points, the source continued. Call protection of 102 in year one, 101 in year two that the tranche was launched with, remained intact.

As for the $65 million revolver (Ba3/BB-), pricing was left unchanged at Libor plus 225 basis points, the source added.

Morgan Stanley and WestLB are the lead banks on the $541 million credit facility, which will be used to help fund Complete Energy Holdings LLC's acquisition of La Paloma, a gas-fired, four-unit combined-cycle facility located in Kern County, Calif., for about $560 million in cash plus potential adjustments of up to $50 million.

Huntsman downsizes, cuts spread

Huntsman International downsized its term loan B while upsizing its revolver, resulting in an overall reduction in total facility size of about $100 million from $2.6 billion, according to a market source. Furthermore, pricing on the U.S. term loan B was reduced on strong demand.

The syndicate reduced the size of Huntsman's euro term loan B tranche to €100 million from a size of up to €150 million, according to a market source. Pricing on the euro piece is set at Libor plus 200 basis points.

Meanwhile, the U.S. term loan B, which is sized at $1.725 billion, saw its pricing reverse flexed to Libor plus 175 basis points from original price talk at launch of Libor plus 200 basis points, the source continued.

And, the revolver was upsized to $650 million from an original size of $600 million, the source added. Pricing on the revolver remained at Libor plus 175 basis points.

The term loan B was offered to investors at par. The books had been closed this past Tuesday.

Allocations on the deal are likely to go out mid-next week.

Deutsche Bank and Citigroup are the lead banks on the Salt Lake City-based chemical company's deal (Ba3/BB-), with Deutsche the left lead.

Proceeds will be used to help fund the merger of Huntsman LLC and Huntsman International LLC, two subsidiaries of Huntsman Corp., into one entity with Huntsman International being the surviving entity.

The purpose of the merger is to simplify Huntsman's financing and SEC reporting structure, facilitate cost reductions for Huntsman's bank credit facilities and other financing arrangements, and for other organizational efficiencies.

As part of this merger, the existing bank debt at both Huntsman LLC and Huntsman International is being retired. And, being that these two companies have a significant amount of outstanding loan debt, there was a relatively large lender group in place - a factor that seems to have worked in the new deal's favor.

As of March 31, Huntsman International had a $375 million revolver that was undrawn and about $1.178 billion of term loan B debt outstanding, as well as a €45.1 million term loan.

Huntsman LLC had about $715 million of term loan B debt outstanding as of March 31 and about $61.3 million drawn under its $350 million revolver.

Spanish Peaks upsizes, cuts spread

Spanish Peaks upsized both its revolver and term loan while reducing pricing on both tranches to Libor plus 275 basis points from Libor plus 300 basis points, according to a market source.

The revolver was increased to $37.5 million from $20 million and the term loan was increased to $87.5 million from $80 million, the source said.

Credit Suisse First Boston is the sole lead bank on the deal.

Proceeds from the $125 million six-year credit facility will be used for return of capital and debt refinancing.

Spanish Peaks is a Big Sky, Mont., private residential and recreational development.

Genoa breaks

Genoa Healthcare freed up for trading during market hours Thursday, with the $100 million first-lien term loan (B2/B) quoted at 101¼ bid, 101¾ offered from open until close and the $50 million second-lien term loan (Caa1/CCC+) quoted at 102 bid, 103 offered from open until close, according to a trader.

The first-lien term loan is priced with an interest rate of Libor plus 325 basis points, and the second-lien term loan is priced with an interest rate of Libor plus 775 basis points.

The second-lien term loan contains call protection of 102 in year one and 101 in year two.

Last week, Genoa increased the size of its first-lien term loan from $90 million and reverse flexed pricing on the tranche from Libor plus 350 basis points. At the same time, pricing on the second-lien term loan was reverse flexed from Libor plus 800 basis points.

Genoa's $170 million credit facility also contains a $20 million revolver (B2/B) with an interest rate of Libor plus 350 basis points.

Morgan Stanley and GE Capital Corp. are the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds from the credit facility will be used for a dividend recapitalization.

Genoa is a Tampa, Fla.-based manager of 61 skilled nursing facilities.

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