Warner Chilcott upsizes; Maxim oversubscribed; Rayovac, Celanese get orders; Deutsche wins portfolio

By Sara Rosenberg

New York, Jan. 11 - Warner Chilcott Corp. increased the size of its in-market term loan B on Tuesday and downsized its proposed bond deal by the equivalent amount. As for newly launched deals, Maxim Crane Works has already filled the books and then some on its $325 million exit financing credit facility, Rayovac Corp. has already gotten some commitments in and is expected to go well as the company has a good history with acquisitions and there is a large existing lender base to tap, and Celanese Corp. has gotten a nice amount of orders already on its incremental bank debt.

On the secondary front, Deutsche Bank won the CLO portfolio auction by a hair as a couple of the top bids came in close to each other.

Warner Chilcott upsized its term loan B by $150 million to $1.4 billion and downsized its bond offering by $150 million to $600 million, according to market sources

"I guess the loan is going extremely well. Maybe the bonds are struggling a bit because they're like 7x total levered. It's like 5x levered through the bank debt," one source hypothesized.

Price talk on the seven-year term loan B remained at Libor plus 275 basis points. The tranche is being offered to investors at par.

Warner Chilcott's now $1.79 billion senior secured credit facility (B) also contains a $240 million seven-year delayed-draw (for one-year) term loan talked at Libor plus 275 basis points, with a 137.5 basis points commitment fee and a $150 million six-year revolver talked at Libor plus 250 basis points, with a 50 basis points commitment fee.

A bank meeting was held last Tuesday and the launch saw huge attendance with the room overflowing with interested parties, a source previously told Prospect News, adding that one of the key factors working for the deal's expected success is the amount of free cash flow that the company generates.

Deutsche Bank and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the deal with Deutsche left lead, CSFB is administrative agent, Deutsche is syndication agent, and JPMorgan and Morgan Stanley are co-documentation agents.

Proceeds from the term loan B, along with proceeds from the senior subordinated notes offering, will be used to help fund the acquisition of Warner Chilcott PLC by DLJ Merchant Banking, JP Morgan Partners, Bain Capital and Thomas H. Lee.

The delayed-draw is for one-year and proceeds will be used for product acquisition.

Warner Chilcott is a U.K.-based branded pharmaceutical manufacturer and marketer

Maxim Crane oversubscribed

Both of Maxim Cranes' term loans are oversubscribed, even though the bank meeting to launch the deal just took place on Tuesday, as investors felt comfortable with the "well known historical credit", according to a market source.

Furthermore, now that the deal launched, pricing was revealed with the $175 million term loan in the Libor plus 300 basis points area, the $100 million second-lien term loan in the Libor plus 600 basis points area and the $50 million revolver in the Libor plus 300 basis points area, the source added.

Goldman Sachs is the lead bank on the Pittsburgh-based crane rental company's deal.

Rayovac expected to go well

Syndication of Rayovac's approximately $1.2 billion credit facility (B1), which kicked off via a bank meeting on Tuesday, is expected to go fine as investors have been impressed with Rayovac's past acquisitions and the company and the soon to be acquired company, United Industries Corp., each have existing, relatively large, loan lender groups.

"Rayovac has done well. The management team has done a good job. All acquisitions they've done in the past - the synergies and cost savings they said would happen, did," a fund manager told Prospect News.

"[The combination of Rayovac and United] does sound like a better match then I thought it would when I first heard they were putting the two together. I would imagine I would commit," the fund manager said.

"Also, it involves two existing borrowers so they probably have people involved in both deals looking at this," the fund manager said.

"There is expected rollover from both those groups," a second source added.

And, in fact, according to the second source, some commitments have already come in to the deal, although just how much has been committed and whether the commitments came from existing lenders was unavailable since it is too early in the process.

Rayovac's facility consists of a $300 million revolver talked at Libor plus 225 basis points, a $740 million term loan B talked at Libor plus 225 to 250 basis points, a euro term loan B tranche in the equivalent of $140 million talked at Libor plus 275 basis points and a Canadian term loan B tranche in the equivalent of $50 million talked at Libor plus 225 to 250 basis points.

Bank of America, Citigroup and Merrill Lynch are the lead banks on the deal, with Bank of America left lead.

Rayovac is acquiring United Industries for a total value of approximately $1.2 billion including the assumption of approximately $880 million of United Industries debt - comprised of senior debt and senior subordinated notes - that will be redeemed or replaced and a cash tax benefit of $140 million.

In addition to helping fund the acquisition, proceeds from the facility will also be used to refinance Rayovac's existing credit facility.

Rayovac will issue $500 million of senior subordinated notes via Bank of America, Citigroup and Merrill Lynch to help fund the acquisition as well. Rayovac's existing bonds will remain outstanding following the acquisition so the newly capitalized company will have $850 million of senior subordinated notes outstanding.

The transaction, which is expected to close in February, is subject to approval under the Hart-Scott-Rodino Anti-trust Improvements Act and other customary closing conditions. The transaction has been approved by United's shareholders.

After closing on the deal, Rayovac's senior leverage will be approximately 2.6x and total leverage will be approximately 5x, according to the fund manager.

Commitments towards the credit facility are due on Jan. 28.

Rayovac is an Atlanta-based consumer products company making battery, shaving and grooming, and lighting items.

United Industries is a St. Louis-based manufacturer and marketer of consumer products for lawn and garden care and household insect control. Currently 83% of United is owned by Thomas H. Lee Equity Fund IV. It is anticipated that following the transaction Thomas H. Lee will hold an ownership position in Rayovac of approximately 25%.

Celanese commitments roll in

Celanese has a "substantial amount of orders in already so there's good momentum" on its $1.385 billion term loan B add-on, according to a market source who remarked that the bank meeting went really well as management is well rehearsed in presenting the business since they are also on the road with an initial public offering.

The term loan B, of which $250 million is delayed draw, is priced with an interest rate of Libor plus 250 basis points - in line with existing term B pricing, the source said. Pricing can step down to Libor plus 225 basis points after the first quarter depending on leverage.

Celanese is also looking to get a $220 million add-on to its revolver, which is priced at Libor plus 225 basis points, also in line with existing pricing.

The Dallas-based chemical company's term loan is being offered at par and revolver commitments of $10 million or more get 50 basis points upfront.

Although these are add-ons to the existing credit facility, the Tuesday bank meeting was open to everyone because of the large size of the incremental term B bank debt, the source explained.

Celanese is getting the additional bank debt in connection with its IPO of Series A common stock that is expected to generate net proceeds of approximately $949 million and a preferred stock offering that is expected to generate net proceeds of approximately $194 million. These proceeds will be used to redeem notes and pay a portion of a $952 million dividend to the holders of the company's Series B common stock.

Proceeds from the non-delayed-draw term loan B will be used to repay the amounts outstanding under the existing senior credit facilities and the floating rate term loan, and to pay $582 million of the dividend payment.

Proceeds from the delayed-draw term loan B will be used for the Acetex Corp. and Vinamul Polymers acquisitions.

Commitments are due Jan. 21 and closing is anticipated for Jan. 26.

Deutsche Bank, Morgan Stanley and Bank of America are the lead banks on the deal, with Deutsche left lead.

Accuride structure unaffected by IPO

Accuride Corp.'s in-market $740 million credit facility will be unaffected in terms of structure and pricing by Monday's initial public offering filing even though the company stated in the filing that it plans on repaying some of its new term loan B debt with a portion of the IPO proceeds, according to a market source.

"There will be no change other than how people may perceive the deal," the source said. "The acquisition (of Transportation Technologies Industries Inc. - which is why the debt is being obtained) is not contingent on the IPO. The IPO won't happen till March. They're going to try and hopefully get a better rating than they expected to get when the deal first launched. They never went out with expected ratings but existing is B2/B. As of now, this won't have any affect on pricing. People have already been grumbling that pricing is a little thin, but meanwhile they've been signing on to it."

And, indeed people have been committing to the deal with something like two thirds of the term loan B full as of Monday evening. The deal just launched to investors last Thursday.

The $615 million seven-year term loan B is talked at Libor plus 250 basis points.

The facility also contains a $125 million five-year revolver with price talk of Libor plus 250 basis points.

The term loan B is being offered at par. Upfront fees on the revolver are 150 basis points for a $30 million commitment and 125 basis points for a $15 million commitment.

Commitments are due by Jan. 21.

Citigroup Global Markets Inc. and Lehman Brothers Inc. are joint lead arrangers on the deal, with Citi left lead, and UBS Securities LLC is documentation agent.

Proceeds will be used to refinance both Accuride and Transportation Technologies senior bank debt and Transportation Technologies' subordinated debt.

Upon completion of the merger, which is expected to occur this month, Accuride stockholders will own 65% of the common stock of the combined entity while Transportation Technologies' stockholders will own 35% of the common stock

Accuride is an Evansville, Ind., manufacturer and supplier of wheels for heavy/medium trucks and trailers. Transportation Technologies is a Chicago manufacturer of truck components for the heavy and medium-duty trucking industry.

CLO auction won by Deutsche

Deutsche Bank won the auction for an approximately $200 million portfolio that was being sold by a CLO that is liquidating, according to traders. The cover bid was 101.126.

"There were at least three bids within four basis points of each other and Deutsche was on top," one trader added.

Bids were due at 10 am ET Tuesday. The seller led the auction and everyone had been invited to bid on the portfolio.

Gate Gourmet B backs off ahead of pro rata auction

Gate Gourmet Inc.'s U.S. dollar term loan B1 fell off a little bit early in the session on Tuesday ahead of an auction for foreign currency term loan A and revolver paper that came out of London, according to traders.

The term loan B was quoted in the 95 context, compared to previous trades in the 96 to 97 type of range, one market source said.

However, according to a second source, the paper rebounded from the early day lower levels to end the session unchanged from Monday's levels at 95½ bid, 96½ offered.

As for the pro rata auction, "I thought 92, 94 was the context but I haven't seen it trade," the second source added.

Gate Gourmet has been under some scrutiny recently as the company failed to make an amortization payment on its loans and an interest payment on its mezzanine debt, which means that technically an event of default under the credit agreement has occurred.

In light of these missed payments, Standard & Poor's downgraded the company's bank loan ratings to D last week from BB and Moody's Investors Service downgraded the company's bank loan ratings to Caa1 from B1 this week.

Nothing has been decided by the bank loan lenders in terms of a course of action regarding the default, but various options are being reviewed.

Gate Gourmet is a Zurich, Switzerland-based airline catering company.

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