Kodak firms structure, nets orders; Mega Bloks cuts spread; Cheniere readies allocations on tweaked loan

By Sara Rosenberg

New York, Aug. 31 - Eastman Kodak Co. firmed up the structure on its $2.7 billion credit facility, set upfront fees and saw some early orders come in as the deal launched via a bank meeting Wednesday.

Meanwhile, Mega Bloks Inc. reduced pricing on its term loan B by 50 basis points and set the recommitment deadline for Thursday.

And, Cheniere LNG Holdings LLC is expecting to allocate and break for trading on Thursday its recently upsized and reverse flexed term loan now that lenders have recommitted to the tweaked deal and the overfull books are closed.

Kodak launched its proposed senior secured credit facility on Wednesday with the late-summer bank meeting netting "great attendance" and early commitments already finding their way into the books by afternoon, according to a market source.

The syndicate opted to launch the new deal with a $1.2 billion five-year revolver - the high side of the previous $1 billion to $1.2 billion talk - and, as was planned, $1.5 billion in seven-year institutional term loans.

The revolver is talked at Libor plus 150 bps and upfront fees emerged during the launch at 100 bps for $100 million commitments, 75 bps for $75 million commitments, 50 bps for $50 million commitments and 37.5 bps points for $25 million commitments.

The term loan, which is split into $1 billion that will be drawn at close and $500 million delayed draw, is talked at Libor plus 175 bps and is being offered at par.

The delayed-draw portion of the term loan carries a commitment fee of 150 bps and is delayed draw until June 2006, the source said.

Commitments are due Sept. 15.

Citigroup Global Markets Inc. is the lead arranger on the deal.

Borrowings under the revolver, which will replace the company's existing $1.225 billion five-year revolver expiring in July 2006, will be available for general corporate purposes.

Term loan proceeds will be used to repay existing company debt primarily arising out of the acquisition of Creo, which was completed on June 15.

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

Mega Bloks reverse flexes

Mega Bloks lowered pricing on its $260 million seven-year term loan B to Libor plus 175 bps from Libor plus 225 bps and gave investors until Thursday to recommit to the repriced tranche, according to a fund manager.

The $400 million credit facility (Ba3/BB-) also contains a $60 million five-year Canadian revolver, a $40 million five-year U.S. revolver and a $40 million five-year term loan A - with all three pro rata tranches priced with an interest rate of Libor plus 200 bps.

Proceeds from the term loans, which launched on Aug. 18, are being used to fund the already completed $350 million acquisition of Rose Art Industries Inc., refinance $12.3 million of debt, add $2.6 million of cash to the balance sheet and pay about $9 million of fees and expenses.

Both revolvers are expected to be undrawn at closing and will be used for working capital purposes.

Bank of Nova Scotia and Bank of Montreal are the lead banks on the deal.

Mega Bloks is a Montreal-based producer of fun and educational construction toys.

Cheniere breaking Thursday

Cheniere's term loan is expected to break for trading Thursday as books were closed at the end of business Tuesday for recommitments to the recently modified deal, according to a market source.

The seven-year senior secured term loan B (BB) was upsized to $600 million from $500 million and pricing on the tranche was reverse flexed to Libor plus 275 bps from Libor plus 325 bps, the source said.

The term loan was issued to investors at par. New and existing lenders were invited to participate in the new deal.

Cheniere just launched this term loan on Aug. 22 and only gave investors until this past Monday to commit to the facility. Although this was a short commitment deadline schedule, it apparently had no negative affect on the syndication process as investor demand allowed for the upsizing and reduced pricing.

Credit Suisse First Boston is the lead bank on the term loan that actually funded and closed on Wednesday.

Cheniere LNG is an indirect, wholly owned subsidiary of Houston-based Cheniere Energy Inc. It owns Cheniere Energy's 100% equity interest in Sabine Pass LNG LP and 30% limited partner equity interest in Freeport LNG Development LP, each of which owns an LNG receiving terminal project that is currently under construction.

Proceeds from the term loan will be used to fund Cheniere Energy's remaining equity requirements for the construction of the Sabine Pass terminal, fund a reserve account for facility debt service obligations and pre-operating expenses, fund equity requirements including funds for the potential expansion of the Sabine Pass terminal, construction of the Corpus Christi and/or the Creole Trail receiving terminals and pipelines, and for general corporate purposes.

Security for the loan is a debt service reserve, all of the capital stock or other equity interests directly held by Cheniere LNG with respect to the projects and all of Cheniere LNG's capital stock.

Delphi drops again

Consistent with its performance all week, Delphi Corp.'s bank debt continued to slide lower on Wednesday as investors cannot seem to shake concerns over the hoped for financial bailout of the company.

The term loan was quoted at 102 bid, 102½ offered, compared to levels of 102 3/8 bid, 102¾ offered on Tuesday, and the revolver was quoted at 94½ bid 95 offered, compared to levels of 95 bid, 95½ offered on Tuesday, according to a trader.

The bank debt opened on Monday around 103 bid, 104 offered on the term loan and around 95½ bid, 96½ offered on the revolver.

Delphi is looking to former corporate parent General Motors Corp. for some sort of financial bailout and has warned that it could be forced into Chapter 11 if it does not get concessions from the United Auto Workers union and help from GM.

The company's bank debt has been under pressure all week because media reports emerged over the weekend saying that UAW wouldn't support all the concessions being sought by the companies.

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

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