Accuride B downsized, reverse flexed; Hawkeye resets launch; Maxim breaks; DS Waters drips lower

By Sara Rosenberg

New York, Jan. 26 - Accuride Corp. made new changes to its in-market term loan B on Wednesday, including decreasing both the size and pricing on the tranche, after the company opted to upsize its bond offering. Meanwhile, Hawkeye Renewables LLC pushed off its bank meeting by two days due to room availability issues.

On the secondary front, Maxim Crane Works' credit facility allocated and broke for trading. Also, DS Waters of America LP's bank debt had a tumultuous day, with levels dropping by a couple of points in the morning and then regaining some losses by late day on news that parent company Groupe Danone would be writing down a charge for its investment in the company.

Accuride downsized its seven-year term loan B to $550 million from $615 million and lowered pricing to Libor plus 225 basis points from Libor plus 250 basis points, with a step down to Libor plus 200 basis points if total leverage is 31/2x, according to a market source. The step down can only occur after six months from closing.

On the flip side, the company upsized its 10-year note offering to $275 million from $225 million and priced the deal at par to yield 8½%. Price talk had been 8 3/8% to 8 5/8%.

The $15 million reduction in size of the overall acquisition financing debt package - $50 million added to bonds but $65 million taken away from loans - will be covered by cash on hand, the source explained.

This is the second round of changes made to the term loan B. On Tuesday, the syndicate had added a pricing grid - but left the Libor plus 250 basis point pricing unchanged - to the B loan calling for a step down six months after closing to Libor plus 225 basis points if total leverage is 4.25x and Libor plus 200 basis points if total leverage is 31/2x. However, with this new reverse flex, the pricing grid was narrowed down to just one step down as opposed to two.

Once again, Accuride's $125 million five-year revolver was left unchanged in terms of size and pricing, with the initial interest rate set 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 $675 million credit facility (B2/B+), along with proceeds from the bond deal, 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.

Citigroup Global Markets Inc. and Lehman Brothers Inc. are joint lead arrangers on the credit facility, with Citigroup the left lead. 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.

Hawkeye resets launch

Hawkeye Renewables rescheduled its bank meeting to Friday from Wednesday due to problems finding an available room to host the meeting, according to a market source. The actual decision to reschedule had been made on Tuesday.

But, even though the $180 million seven-year senior secured term loan (B2) will not officially be launching until week's end, the deal has received "good interest so far" as a "first commitment" has already been placed, the source added.

The term loan is talked at Libor plus 350 basis points, and Standard & Poor's is expected to rate the deal at B.

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

Proceeds will be used for project financing, which basically entails building up existing plants and new plants.

Hawkeye Renewables is an Iowa Falls, Iowa, manufacturer of alcohol based fuel derived from corn.

Maxim Crane breaks

Maxim Crane's $325 million exit financing credit facility opened for trading during Wednesday's session, with the first-lien term loan quoted at 101½ bid, 102 offered and the second-lien term loan quoted at 102¼ bid, 103 1/8 offered, according to a trader.

The $175 million first-lien term loan is priced at Libor plus 275 basis points, after reverse flexing from the Libor plus 300 basis point area during syndication, and the $100 million second-lien term loan is priced at Libor plus 550 basis points, after reverse flexing from the Libor plus 600 basis point area during syndication.

Both term loans were oversubscribed on the day of the bank meeting last week, with some saying that the immediate success was a result of investors feeling comfortable with the well known historical credit.

Maxim Crane's facility also contains a $50 million revolver priced at Libor plus 275 basis points that was also reverse flexed during syndication from the Libor plus 300 basis point area.

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

DS Waters lower

DS Waters, a joint venture formed by Groupe Danone and Suntory Ltd., saw its bank debt plummet all the way to 91 bid, 92 offered from 95 bid, 96 offered immediately after Danone announced that it would incur a charge of about €450 million in its 2004 consolidated accounts in relation to its holding in DS Waters, according to a trader.

"These guys are writing off the investment so it doesn't look like they'll continue to support the company," the trader explained. "It may be a sign that the parent is walking away from the company."

By late day though, the paper did regain some ground, heading up to 93 bid, 94 offered - making the total loss for the day about two points, the trader added.

Danone said that the one-time charge consists of an impairment of its holding in DS Waters and a provision for its related commitment to Suntory.

Among factors leading to this impairment decision on its DS Waters holding, Danone cited slower volume growth patterns for the home and office delivery industry, an increasingly aggressive pricing environment on home and office delivery formats and faster-than-expected erosion of cooler rental revenues, the news release said.

As was announced last October, Danone expects to have a solution regarding the long-term strategy for its holding in DS Waters by the end of the first half of 2005.

DS Waters is an Atlanta-based home and office water delivery service company.

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