Boston Gen, Energy Transfer, Revlon, Samsonite break; Worldspan ups deadline; Metaldyne firms spreads

By Sara Rosenberg

New York, Dec. 19 - The secondary market was abuzz with activity as Boston Generating LLC, Energy Transfer Equity LP, Revlon Consumer Products Corp. and Samsonite Corp. all freed for trading and other names, like Ford Motor Co., General Motors Corp. and Toy 'R' Us Inc., saw strong two-way flow.

In primary happenings, Worldspan LP accelerated the commitment deadline on its credit facility as a significant amount of interest was received on the first- and second-lien debt and Metaldyne Corp. firmed up pricing at the tight end of talk.

Boston Generating's credit facility allocated and freed for trading during Tuesday's market hours, with the strip of term loan B and synthetic letter-of-credit facility debt quoted at par 3/8 bid, par 5/8 offered and actively trading within that context throughout the day, according to a trader.

In addition, the company's second-lien term loan was seen quoted at 102½ bid, 103½ offered, the trader said.

The $1.13 billion first-lien seven-year term loan B (B1/B+) and the $250 million seven-year synthetic letter-of-credit facility (B1/B+) are priced at Libor plus 225 basis points and carry 101 soft call protection for one year. During syndication, the term loan B was upsized from $1.08 billion and pricing on both tranches was reverse flexed from original talk at launch of Libor plus 300 bps.

The $350 million 71/2-year second-lien term loan (B3/B-) is priced at Libor plus 425 bps and carries call premiums of 102 in year one and 101 in year two. During syndication, the second-lien loan was downsized from $400 million and pricing was reverse flexed from Libor plus 500 bps.

Boston Generating's $1.8 billion credit facility also includes a $70 million seven-year synthetic revolver (B1/B+) priced at Libor plus 225 bps. During syndication, the revolver was changed to a synthetic tranche, the tenor was revised from five years and pricing was reduced from original talk at launch of Libor plus 300 bps.

On top of the credit facility, Boston Generating is also getting a $300 million 10-year holding company mezzanine tranche priced at Libor plus 700 bps pay in kind with call protection of non-callable for two years, then at 103 in year three, 102 in year four and 101 in year five. During syndication, pricing on this debt was lowered from original talk of Libor plus 850 bps PIK.

Credit Suisse and Goldman Sachs are the lead banks on the power plant's deal, with Credit Suisse the left lead.

Proceeds from the new financing are being used for a dividend recapitalization.

Energy Transfer frees to trade

Also hitting the secondary market on Tuesday was Energy Transfer's $1.3 billion term loan B (Ba2/NA/BB), with levels quoted at par 3/8 bid, par 5/8 offered, according to a trader.

The term loan B is priced at Libor plus 175 bps. During syndication, pricing on the paper was reverse flexed from original talk at launch of Libor plus 200 bps.

UBS and Wachovia acted as the lead banks on the deal, with UBS the left lead.

Proceeds from the term loan B were used to fund the acquisition of about 26.1 million new class G units of Energy Transfer Partners, LP for $1.2 billion.

Energy Transfer Equity is the Dallas-based owner of all the general partner interests in Energy Transfer Partners, an owner and operator of energy assets.

Revlon breaks

Revlon Consumer Products' credit facility was yet another new issue to start trading during the session, with the $840 million five-year term loan (B3/CCC+) quoted at par 5/8 bid, 101 1/8 offered, according to a trader.

The term loan is priced at Libor plus 400 bps and carries call premiums of 103 in year one, 102 in year two and 101 in year three. During syndication, pricing on the term loan was flexed up from original talk at launch of Libor plus 350 bps.

Revlon's $1 billion credit facility also includes an amended $160 million multi-currency revolver (B1) priced at Libor plus 200 bps.

The revolver is being amended to, among other things, extend its maturity through the same five-year period as the new term loan and lower pricing from Libor plus 250 bps.

Citigroup is the lead arranger and bookrunner on the deal. JPMorgan is the syndication agent on the term loan.

Proceeds from the new term loan will be used to refinance the company's existing $800 million term loan that is priced at Libor plus 600 bps. This refinancing is expected to provide the company with greater financial and other covenant flexibility, in addition to a lower interest rate and extended maturity.

Revlon is a New York-based cosmetics, skin care, fragrance and personal care products company.

Samsonite trades atop par

Last on the list of deals breaking for trading was Samsonite, with its $450 million seven-year term loan B quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan B is priced at Libor plus 225 bps and was sold to investors with an original issue discount of 993/4. The OID was added to the deal during syndication.

Samsonite's $530 million senior secured credit facility (Ba3/BB-) also includes an $80 million six-year revolver priced at Libor plus 225 bps.

Merrill Lynch, Goldman Sachs and Deutsche Bank are the lead banks on the deal that is secured by substantially all of the company's domestic assets.

Proceeds will be used to help fund tender offers for the company's $164.97 million of 8 7/8% senior subordinated notes due 2011 and €100 million floating-rate senior notes due 2010, and a $175 million special dividend to stockholders.

Samsonite is a Denver-based designer, manufacturer and distributor of luggage and travel-related consumer products.

GM, Ford, Toys trade up

Overall the secondary market felt better by an eighth to a quarter of a point on the day, with names like Ford, General Motors and Toys 'R' Us being good examples of the strengthening, according to traders.

"The market felt better generically. [There was] good two-way flow. There was quite a bit of volume - above the norm for this time of year. People are pushing to get things done. Guys are reaching for coupon going into the new year. That's why the market is trading so tight," one trader explained.

Ford, a Dearborn, Mich.-based automaker, saw its term loan B closed the day at par bid, par ¼ offered, up a quarter of a point, traders said.

General Motors, a Detroit-based automaker, saw its term loan close the day at par 1/8 bid, par 3/8 offered, up an eighth of a point.

And, Toys 'R' Us, a Wayne, N.J., specialty toy retailer, saw its new term loan close the day at 103 bid, 103½ offered, up a quarter of a point, and its old loan close the day at par 5/8 bid, par 7/8 offered, up an eighth of a point, trader added.

Worldspan moves up deadline

Worldspan changed the commitment deadline on its $1 billion credit facility to the close of business Tuesday from the close of business Wednesday as strong investor demand has come through on both the first- and the second-lien loans, according to a market source.

The facility consists of a $50 million six-year revolver (Ba3/B) talked at Libor plus 325 bps, a $700 million seven-year first-lien term loan B (Ba3/B) talked at Libor plus 325 bps and a $250 million eight-year second-lien term loan (B3/CCC+) talked at Libor plus 700 bps.

The second-lien term loan is callable at par for the first nine months, then at 100.5 for months nine through 12, 101 for months 12 through 18, 101.5 for months 18 through 36 and 100.75 for months 36 through 48.

Credit Suisse and Lehman are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to refinance the company's existing senior credit facility and to redeem all of its outstanding senior second-lien secured floating-rate notes due 2011.

The $300 million of outstanding notes will be redeemed in full on or about Jan. 8 at a redemption price of 103.

Simultaneously with the recapitalization, Worldspan is being merged into a subsidiary of Travelport Ltd. in a transaction that values Worldspan at $1.4 billion.

As part of the merger, Travelport is loaning $125 million to Worldspan in exchange for a PIK note. Furthermore, one of Travelport's parent companies is also loaning Worldspan $125 million in exchange for a PIK note.

Worldspan is an Atlanta-based provider of travel technology services for travel suppliers, travel agencies, e-commerce sites and corporations.

Metaldyne firms at low end

Metaldyne firmed up pricing on its institutional tranches at Libor plus 375 bps, the tight end of original guidance of Libor plus 375 to 400 bps, according to a market source.

The institutional debt is comprised of a $420 million seven-year term loan (B2/B), a $25 million seven-year delayed-draw term loan (B2/B) and a $60 million five-year deposit linked synthetic supplemental letter-of-credit facility (B2/B).

The delayed-draw term loan will be available for drawing for 59 days after the closing date for the purpose of funding the purchase of senior notes in a tender offer.

Metaldyne's $655 million credit facility also includes a $150 million five-year asset-based revolver (Ba3/BB-) priced at Libor plus 200 bps with unused fees that can range from 25 to 50 bps.

There is a $75 million accordion feature under the asset-based revolver.

Financial covenants under the term loan, delayed-draw loan and letter-of-credit facility include a maximum total leverage ratio, a minimum interest coverage ratio and limitations on capital expenditures.

Financial covenants under the revolver include a springing minimum fixed charge coverage ratio if excess availability falls below $40 million at any time.

JPMorgan and Citigroup are the joint lead arrangers on the deal, and JPMorgan, Citigroup and Deutsche Bank are the bookrunners. JPMorgan is administrative agent, Citigroup is syndication agent and Deutsche is documentation agent.

Proceeds from the credit facility will be used to help back Asahi Tec Corp.'s approximately $1.13 billion acquisition of the company and to replace Metaldyne's existing revolver, letter-of-credit facility, term loan debt and off-balance sheet accounts receivable securitization facility.

The financing is structured so that Asahi Tec and Metaldyne do not guarantee each other's debt and will not be subject to restrictions on each other's debt.

Pro forma for the transaction, Metaldyne's total leverage will decrease to 4.6 times from 5.1 times and interest coverage will increase to 2.2 times from 1.8 times.

Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier, is buying Metaldyne from Heartland Industrial Partners LP and CSFB Private Equity.

Metaldyne is a Plymouth, Mich., supplier of powertrain and chassis systems and components.

Denny's closes

Denny's Corp. closed on its new $350 million senior secured credit facility (Ba2) consisting of a $50 million five-year revolver at Libor plus 250 bps, a $260 million 51/2-year term loan at Libor plus 225 bps and a $40 million 51/2-year synthetic letter-of-credit facility at Libor plus 225 bps, according to a company news release.

During syndication, pricing on the term loan and synthetic letter-of-credit facility was reverse flexed from original talk at launch of Libor plus 250 bps.

Bank of America acted as lead arranger and bookrunner on the deal that was used to refinance the company's existing credit facility and will be available for working capital, capital expenditures and other general corporate purposes.

Denny's is a Spartanburg, S.C., full-service, family-style restaurant chain.

Aleris closes

Texas Pacific Group completed its leveraged buyout of Aleris International Inc., according to a news release.

To help fund the LBO, Aleris got a new $1.975 billion senior secured credit facility consisting of an $825 million seven-year U.S. term loan B (B2/B+) at Libor plus 237.5 bps with a step down to Libor plus 212.5 bps at less than 4.0 times leverage, a $400 million dollar equivalent seven-year Euro term loan B (B2/B+) at Euribor plus 250 bps with a step down to Euribor plus 225 bps at less than 4.0 times leverage and a $750 million five-year asset-based revolver at Libor plus 150 bps.

During syndication, the U.S. term loan B was upsized from $700 million and pricing was lowered from original talk at launch of Libor plus 275 bps with the addition of the step, and pricing on the Euro term loan B was lowered from original talk at launch of Euribor plus 275 bps with the addition of the step.

The additional $125 million of term loan debt was raised as a result of the company's decision to reduce its senior subordinated notes offering by $100 million to $400 million and to raise $25 million of extra capital.

Because of the loan upsizing, senior secured leverage increased to 2.9 times from 2.6 times.

In addition, to the credit facility and the senior subordinated bonds, the company got $600 million of senior PIK toggle notes for LBO financing.

Deutsche Bank acted as the lead bank on the deal.

Aleris is a Beachwood, Ohio, manufacturer of aluminum rolled products and extrusions, aluminum recycling and specification alloy production.

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