Accuride adds term B pricing grid; Ntelos and Builders FirstSource get early orders

By Sara Rosenberg

New York, Jan. 25 - Accuride Corp. added a pricing grid to its in-market term loan B based on leverage and set a recommitment deadline for Thursday with the hope to allocate as early as Friday. Meanwhile, Ntelos Inc.'s bank meeting was well attended - no surprise being that strong investor interest was apparent before launch as a number of verbal commitments had come in pre-meeting for both the first-and second-lien term loans. And, Builders FirstSource Inc.'s newly launched loan attracted some early commitments as well.

Accuride left pricing on its $615 million seven-year term loan B at Libor plus 250 basis points but added a grid which allows pricing on the tranche to step down six months after closing to Libor plus 225 basis points if leverage is 4.25x and Libor plus 200 basis points if leverage is 31/2x, according to a market source.

The addition of the pricing grid to the institutional term loan is not expected to cause any problems in terms of syndication being that the tranche is currently "pretty well oversubscribed," the source added.

Initial pricing on Accuride's $125 million five-year revolver was left unchanged at 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.

Earlier this month, Accuride filed a registration form with the Securities and Exchange Commission for an initial public offering of common stock in which the company revealed that it plans to repay some if its new term loan B debt with a portion of the IPO proceeds. This IPO is expected to take place around March of this year, a source previously told Prospect News.

Proceeds from the $740 million credit facility (B2/B+), along with proceeds from $225 million senior subordinated notes due 2015, will be used to refinance debt in connection with the acquisition of Transportation Technologies Industries Inc. Both Accuride and Transportation Technologies senior bank debt and Transportation Technologies' subordinated debt are being refinanced.

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.

The bond deal, which is expected to price on Wednesday, is talked at 8 3/8% to 8 5/8%. Although price talk on the bonds and the addition of the term loan B pricing grid were both revealed on Tuesday, the two acts "were independent of each other," the source added.

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

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.

Ntelos sees good attendance

Ntelos' bank meeting was said to have gone well and syndication is expected to go off without a hitch being that there was already "strong indication" from a lot of accounts prior to the bank meeting of verbal commitments, with both the first-lien and the second-lien term loans catching interest, according to a market source.

"Leverage is fairly low - five times through the second [and] 3.1x through the first. Accounts looking for 'yieldy' paper will be attracted to this deal. [Also] it's pretty straightforward from a credit perspective," the source explained.

The $400 million first-lien term loan is talked at Libor plus 275 basis points, and the $225 million second-lien term loan is talked at Libor plus 550 basis points. Both tranches are being offered to investors at par.

There is also a $35 million revolver tranche with price talk of Libor plus 275 basis points.

"Certainly the market is happy to snap it up," a buyside source said. They are "generating free cash flow and could pay down debt. Sponsors are not bad. Businesses [are] not bad.

"[However], overhanging the whole thing is regulatory issues. There's a general risk to rural customers that regulation will change legislation and how long they will stay profitable for. It looks OK though," the buyside source added.

Originally, Ntelos was expected to hold its bank meeting on Monday but the launch was pushed off by one day "because of the snow [in New York] and the guys flying in internationally couldn't get in," the source added.

Morgan Stanley Senior Funding Inc. and Bear Stearns & Co. Inc. are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley the left lead and administrative agent.

Proceeds from the $660 million senior secured credit facility will be used to help in the recapitalization and sale of the company to affiliates of Quadrangle Capital Partners LP and Citigroup Venture Capital.

In the first step of the transaction, Ntelos will refinance its existing debt and repurchase up to 75% of its existing equity in a self-tender offer at a price of $40 per common share.

Following that step, Quadrangle and CVC will purchase up to 24.9% of the post-recapitalization equity of the company, also at a price of $40 per share.

And, after receipt of regulatory approvals, Quadrangle and CVC will acquire the remainder of the company's equity, at the same $40 per share price, in a merger transaction.

The closings of the refinancing and initial stock repurchase by the company are not conditioned on the sale of any equity to Quadrangle and CVC.

Ntelos is a Waynesboro, Va., regional integrated communications provider.

Builders FirstSource nets orders

Builders FirstSource's $250 million six-year first-lien term loan has already caught the eye of investors as the bank meeting was really well attended and early commitments have made their way into the book, according to a market source. The tranche is talked at Libor plus 275 basis points.

According to the source, the company already has an existing lender group that knows the credit so there is good potential for rollover commitments. Also, this new term loan is only about $20 million larger than the existing term loan that was obtained around March 2004.

Also, there's less leverage this time around, with total leverage at 4.1x and first-lien leverage at 2.1x, the source explained, adding that when the existing deal was launched last year total leverage was 4.5x.

The $375 million credit facility (B1/B+), which also contains a $110 million five-year revolver talked at Libor plus 250 basis points and a $15 million six-year prefunded letter-of-credit facility talked at Libor plus 275 basis points, just launched via a bank meeting on Tuesday, after being postponed from Friday because management wanted more time to prepare.

UBS and Deutsche Bank are the lead banks on the deal, with UBS the left lead.

Proceeds will be used to pay a $237 million dividend and repay existing debt.

The company is also expected to issue $250 million in second-lien senior secured floating-rate notes.

Builders FirstSource is a Dallas supplier of building products to professional, large-scale homebuilders.

Tower Auto holds steady

Tower Automotive Inc.'s bank debt traded around par a couple of times on Tuesday and even at one point traded slightly above par, shrugging off the recent liquidity concerns and Chapter 11 rumors as investors are confident in their recovery prospects in a worst-case situation, according to a trader.

"The bonds have been off like 30 to 40 points. The bank debt has held in. The lowest it traded in the last couple of weeks is 991/4. It's up to par now.

"Whisper is a potential pre-packaged bankruptcy deal. Hedge fund, bank loan markets would probably supply some sort of financing because Tower can't just disappear. Big companies like Ford need them to stay around. It's all just speculation at this point but where there's smoke there's fire," the trader added.

Calls to Tower seeking comment were not returned.

On Thursday, the Novi, Mich.-based maker of automotive assemblies cautioned that that its initiatives to improve liquidity were adversely impacted by longer-than-expected customer shutdowns over the holiday season and that it still faces significant challenges in meeting its liquidity requirements especially in the wake of the elimination of early payment programs from the company's customers.

Tower said it was continuing to work with its customers and suppliers to address its liquidity issues and was also continuing to pursue a European factoring facility, the possible sale of certain equipment and other liquidity initiatives.

That warning prompted Standard & Poor's to cut on Friday Tower's corporate credit to CCC from B, senior secured first-lien rating to CCC from B and second-lien rating to CC from CCC+.

And, on Monday, Moody's Investors Service downgraded the first-lien bank debt to B3 from B1, second-lien bank debt to Caa2 from B2 and bonds to Ca from B3.

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