LB Pacific, Oreck see early orders; Universal Compression, American Commercial Lines break

By Sara Rosenberg

New York, Jan. 13 - LB Pacific LP's newly launched credit facility got off to a good start as some early commitments were already in the books just a few hours after launch. And, Oreck Corp.'s credit facility experienced a similar type of success with its launch, as over a third of the B loan was done by late afternoon.

On the secondary front, Universal Compression Holdings Inc. allocated its $650 million senior secured credit facility (Ba2/BB), with the term loan B trading at plus 101 levels during the session. And, American Commercial Lines LLC's restructured bank debt was distributed, with the second-lien term loan trading over 101 and the third-lien term loan trading over 102.

LB Pacific's Thursday morning bank meeting went well with some early orders already placed for the $170 million seven-year term loan B, according to a market source.

"Considering there were a bunch of deals going on today it was well attended," the source said, admitting that the Thursday launch of Complete Energy Services was a potential concern since the two "very different companies" do share the "same kind of space".

Complete Energy Services Inc. launched a $190 million credit facility, consisting of a $50 million four-year revolver talked at Libor plus 300 basis points and a $140 million seven-year term loan B talked at Libor plus 325 basis points, via Wells Fargo. The Houston integrated wellsite provider will be using the facility to refinance existing debt.

The source went on to explain that to new investors the LB Pacific deal could seem a bit complicated but there is an investor base out there that is used to this type of company structure such as those familiar with Magellan Midstream Holdings LP and Buckeye Partners LP.

The B loan is talked at Libor plus 300 basis points and is being offered to investors at par. Commitments are due Jan. 28.

Citigroup is the lead arranger and bookrunner on the deal, and Lehman is the syndication agent.

Proceeds will be used to help fund LB Pacific's acquisition of The Anschutz Corp.'s 36.7% interest in Pacific Energy Partners LP for about $340 million.

More specifically, LB Pacific, a company newly formed by Lehman Brothers Merchant Banking Group, is getting a 100% ownership interest in Pacific Energy GP Inc. (the general partner), which owns a 2% general partner interest in Pacific Energy Partners and the incentive distribution rights, and 10.465 million Pacific Energy Partners subordinated units representing a 34.7% limited partner interest in Pacific Energy Partners.

Approximately $182 million of equity will also be used to help finance the acquisition.

Pacific Energy Partners is a Long Beach, Calif., gatherer, transporter, storer and distributor of crude oil and other related products.

Oreck nets orders

Oreck's $190 million seven-year term loan B had already gotten commitments from five institutions by late Thursday afternoon, for a total of approximately $70 to $80 million in the book, according to a market source.

As for the $20 million six-year revolver, "I think there were existing guys so they'll probably eat that up," the source said.

The bank meeting, which had just taken place Thursday morning, was well attended with standing room only, the source added.

Both the term loan and the revolver are talked at Libor plus 300 basis points. The term loan is being offered at par and the revolver is being offered with a 50 basis points upfront fee for any size commitment. The revolver has an unutilized fee of 50 basis points.

The commitment deadline has been set for Jan. 24.

Royal Bank of Scotland is the lead bank on the New Orleans vacuum company's $210 million credit facility (B1/B+).

Proceeds will be used to refinance the existing credit facility and pay a dividend to sponsor American Securities Capital Partners.

Pro forma for the refinancing, senior and total leverage will be 3.5x.

Del Lab oversubscribed

Del Laboratories Inc.'s $210 million 61/2-year term loan B is "multiple times oversubscribed" and had reached oversubscription levels as early as the start of this week - about two days after launching - with investors favoring the company's strong attributes, according to a market source.

As for the $50 million six-year revolver, "It's pretty small. Got a couple of guys in," the source said.

"[It's] in good shape," the source added about the deal. "It's a good little company."

Some positives about the company include the high amount - about 75% - of sales that come from products they have number one market shares, they are a relatively low cost producer, have steady margins and an experienced management team.

The term loan B is talked at Libor plus 275 basis points and the revolver is talked at Libor plus 250 basis points. Pricing on the revolver is determined by a leverage based grid.

The term loan is being offered to investors at par and the revolver is paying an upfront fee of 75 basis points for $7½ million commitments.

Commitments are due Friday.

JPMorgan and Bear Stearns are joint lead arrangers and joint bookrunners on the $260 million senior secured credit facility (B1/B). JPMorgan Chase Bank is administrative agent, Bear Stearns Corporate Lending Inc. is syndication agent and Deutsche Bank is documentation agent.

Proceeds from the term loan will be used to help fund the acquisition of Del Laboratories by DLI Holding Corp., a company owned by affiliates of Kelso & Co., in a cash transaction valued at $385 million and a total transaction value of approximately $465 million, including the assumption of approximately $80 million of debt.

The company will also use proceeds from a $150 million senior subordinated unsecured notes offering and equity to finance the transaction. The notes are currently in the roadshow stage and are hoped to price around mid-next week.

Originally, Church & Dwight Co. Inc. was expected to participate in the acquisition of Del. However, in December 2004, Church & Dwight pulled out of the deal and Kelso agreed to contribute an additional $30 million to DLI to replace the equity contribution previously committed by Church & Dwight.

Proceeds from the revolver will be used to fund continuing operations and other general corporate purposes.

Del Laboratories is a Uniondale, N.Y., manufacturer, marketer and distributor of cosmetics and proprietary over-the-counter pharmaceuticals.

DynCorp sets launch

DynCorp International LLC has scheduled a bank meeting for Wednesday to launch its proposed $420 million credit facility, according to a market source. Previously it was known that the deal would launch next week but a specific date had been unavailable.

The facility consists of a $75 million revolver and a $345 million term loan. Price talk is not expected to surface until early in the week of the bank meeting.

Goldman Sachs and Bear Stearns are the lead banks on the deal, with Goldman left lead.

Proceeds from the credit facility and a bond offering will be used to help fund Veritas Capital's acquisition of DynCorp from Computer Sciences Corp. for $850 million, with $775 million in cash payable at closing plus $75 million of senior preferred stock. The acquisition is expected to be completed in the first quarter of 2005.

DynCorp is a Fort Worth, Tex., provider of mission critical support to its customers, primarily the U.S. government.

Universal 101 plus

Universal Compression Holdings Inc.'s $400 million seven-year term loan B opened around the 101 bid area, moved up to as high as 101½ bid as more buyers came in to the market and then settled around 101¼ bid, 101½ offered by late day, according to a market source.

"Allocations were a little rough. I heard some guys got like $500,000, $1 million. I think on the break agents tried to clean up some paper so it traded up," the source explained.

A second source agreed with the late day 101¼ to ½ market but said that he never saw the paper bid as high as 1011/2.

The term loan B ended up priced with an interest rate of Libor plus 175 basis points with a step down to Libor plus 150 basis points, after reverse flexing at the end of last week from original price talk of Libor plus 200 basis points.

The facility also contains a $250 million five-year revolver with an interest rate of Libor plus 150 basis points, unchanged since launch.

Wachovia Capital Markets and J.P. Morgan Securities are the joint lead arrangers on the deal.

Proceeds will be used to redeem the $440 million of 8.875% BRL notes, repay $82 million of BRL term debt and $50 million outstanding under the existing revolver, and for working capital needs and general corporate purposes. The 8.875% BRL notes are callable beginning Feb. 15, 2005 at a price of 104.438.

Universal Compression is a Houston natural gas compression services company.

American Commercial breaks

American Commercial Lines $225 million second-lien term loan A was quoted at 101 bid, 101 ½ offered or even as tight as 101 1/8 bid, 101 3/8 offered, according to a trader. The $139 million third-lien term loan B, meanwhile, was quoted at 102 bid, 102½ offered, the trader added.

The term loan A is priced with an interest rate of Libor plus 400 basis points and the term loan B is priced with an interest rate of 10% and a 3% PIK.

JPMorgan and Bank of New York are the agents on the restructured debt that is being obtained in connection with the company's exit from bankruptcy to satisfy obligations to senior secured lenders.

American Commercial Lines, a Jeffersonville, Ind.-based marine transportation and services company, filed for Chapter 11 protection on Jan. 31, 2003.

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