Flag, Maxim trim spreads; Affiliated Computer, Extensity, Infor, Mattamy set talk; ISP Chemco breaks

By Sara Rosenberg

New York, Feb. 14 - Flag Luxury Properties LLC increased the size of its first-lien term loan and reduced pricing on both the first- and the second-lien term loans as the deal was significantly oversubscribed. And, Maxim Crane Works reverse flexed pricing on its term loan as this deal too had been met with overwhelming demand.

In other primary news, Affiliated Computer Services Inc. started floating price talk on its multi-billion credit facility ahead of Wednesday's launch, and Extensity, Infor Global Solutions AG and Mattamy Homes came out with price talk on their credit facilities as all three of these deals held bank meetings on Tuesday to kick off syndication.

On the secondary front, ISP Chemco Inc. freed for trading, with the term loan quoted wrapped around 101, and Movie Gallery Inc.'s bank debt sold off by a few points as news of a new video-on-demand competitor had investors worried over Movie Gallery's future bottom line.

Flag Luxury Properties opted on Tuesday to upsize its first-lien term loan - resulting in an overall larger credit facility - and pricing on both the first- and second-lien term loans was reverse flexed due to strong investor demand, according to a market source.

The five-year first-lien term loan is now sized at $140 million, up from an original size of $135 million, and pricing on the tranche came down to Libor plus 325 basis points from original price talk at launch of Libor plus 350 basis points, the source said.

Meanwhile, the $40 million six-year second-lien term loan was left unchanged in terms of size but pricing was scaled back to Libor plus 650 basis points from original price talk at launch of Libor plus 700 basis points, the source added.

The second-lien term loan contains call protection of 103 in year one, 102 in year two and 101 in year three. These premiums have been in place from the start.

In under a week of the deal's early February launch, the tranches had already received more orders than necessary with about 120% of the target being met at that time, leaving some with the assumption that price changes were only a matter of time.

Credit Suisse is the lead bank on the deal that will be used to repay existing debt and to fund development of a St. Regis resort on Anguilla.

Flag Luxury Properties is a New York-based owner and developer of hotel, residential and retail projects.

Maxim Crane lowers spread

Also making some changes was Maxim Crane Works as the syndicate reduced pricing on its $235 million term loan to Libor plus 200 basis points from original price talk at launch of Libor plus 225 basis points, according to a market source.

The change in spread is hardly a surprise given the fact that the tranche was well oversubscribed even before the company had a chance to officially launch the deal with an early February conference call.

The $285 million credit facility also contains a $50 million revolver that is priced with an interest rate of Libor plus 275 basis points. Pricing on the revolver has been left unchanged since launch.

Early in 2005, the company had completed a $325 million exit financing credit facility consisting of a $50 million revolver at Libor plus 275 basis points, a $175 million first-lien term loan at Libor plus 275 basis points and $100 million second-lien term loan at Libor plus 550 basis points.

Proceeds from this new credit facility will be used to refinance the existing bank debt, including taking out the second-lien term loan.

Goldman Sachs is the lead bank on the deal for the Bridgeville, Pa.-based crane rental company.

Affiliated Computer floats talk

Meanwhile, Affiliated Computer Services came out with price talk of Libor plus 200 basis points on both its $4 billion seven-year term loan and $1 billion six-year revolver as the deal is getting ready to launch with a Wednesday morning bank meeting, according to a market source.

Citigroup is the lead bank on the $5 billion senior secured credit facility (Ba2) that will be used to refinance the company's existing credit facility and to fund an approximately $3.5 billion modified Dutch auction stock tender offer.

The Dutch auction tender has already begun, with the company offering to buy up to 55.5 million shares of its class A common stock at a minimum price per share of $56 and a maximum price of $63.

The tender offer, which is scheduled to expire on March 10, is subject to a number of terms and conditions, including the receipt of financing as well as any applicable regulatory or other consents.

Affiliated Computer Services is a Dallas-based provider of business process and information technology outsourcing solutions to commercial and government clients.

Extensity, Infor guidance

Also on the price talk front was the release of opening spreads on Extensity's credit facility and opening spreads on Infor Global Solutions' second-lien facility (first-lien spreads surfaced last week) as both deals were launched to investor via bank meetings that took place during market hours.

Extensity presented its credit facility to lenders with the $50 million revolver and $360 million first-lien term loan talked at Libor plus 275 basis points, and the $165 million second-lien term loan talked at Libor plus 725 basis points, according to a market source.

The $410 million of first-lien bank debt (B2/B) for Extensity is being led by JPMorgan and Merrill Lynch as joint lead arrangers and joint bookrunners on the deal, with JPMorgan the left lead. The second-lien financing that is being led by D.B. Zwirn Finance as sole syndication agent and administrative agent. It has been previously said that this second-lien financing is not expected to be syndicated to the broader market.

Infor Global also presented its first-lien credit facility (B2/B) to lenders with price talk of Libor plus 275 basis points - as was previously expected by the market - which consists of a $50 million four-year revolver and a $605 million five-year first-lien term loan, the source said.

However, new to emerge was price talk on Infor's $315 million six-year second-lien term loan (Caa2/CCC+), which is comprised of $200 million in existing second-lien debt and $115 million of new second-lien debt, the source continued.

The $200 million of existing second-lien loans is priced with an interest rate of Libor plus 725 basis points and is expected to remain that way, the source said.

But, the $115 million of new second-lien loans was launched to investors with opening price talk of Libor plus 675 basis points, the source added.

JPMorgan and Credit Suisse are the lead banks on the Infor deal.

Proceeds from the Extensity and the Infor credit facilities will be used to fund Golden Gate Capital's leveraged buyout of Geac Computer Corp. Ltd. in an all-cash transaction valued at $11.10 per share, or about $1 billion.

The Extensity credit facility is for Geac's financial applications and the Industry Specific Applications, which are becoming two separate business groups under the newly formed Golden Gate Capital funded company, Extensity.

The Infor credit facility is for the purchase of Geac's ERP software products - including System21, Runtime, RatioPlan, Streamline, and Management Data - and for the purchase of Greenville, S.C., asset management applications provider Datastream Systems Inc. for $10.26 per share in cash.

Infor, an existing Golden Gate Capital funded company, is an Atlanta-based software provider. Geac is a Markham, Ont., enterprise software company that addresses the needs of the chief financial officer.

Mattamy price talk

Last on the list of new deals to release opening price talk on Tuesday is Mattamy Homes, as it decided to launch its $200 million term loan with talk set at Libor plus 225 basis points, according to a market source.

RBC Capital Markets is the lead bank on the deal.

The term loan is expected to have a four-B profile, the source said, adding that the transaction will be privately rated.

Proceeds from the term loan will be used to refinance some existing debt and provide growth capital.

Mattamy is the largest residential homebuilder in Canada.

ISP Chemco around 101

Moving on to the secondary, ISP Chemco allocated its credit facility on Tuesday, with the $950 million term loan B freeing up for trading at levels of par ¾ bid, 101¼ offered and staying in that context throughout the day, according to a trader.

The term loan is priced with an interest rate of Libor plus 175 basis points. During syndication, pricing was reverse flexed from Libor plus 200 basis points.

ISP Chemco's $1.15 billion senior secured credit facility (Ba3/BB-) also contains a $200 million revolver.

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

Proceeds will be used to fund, among other things, the tender for International Specialty Holdings Inc.'s $200 million 10 5/8% senior secured notes due 2009 and $405 million 10¼% senior subordinated notes due 2011 issued by various of the company's subsidiaries.

International Specialty Products Inc., the parent company of International Specialty Holdings Inc. and ISP Chemco Inc., is a New York City-based multinational manufacturer of specialty chemicals, industrial chemicals, synthetic elastomers and mineral products.

Movie Gallery trades off

Movie Gallery saw its term loan come under some pressure on Tuesday as investors are wary over potential bottom line weakening due to a newly launched competitor called MovieBeam Inc., according to a trader.

The term loan closed out the day down about 2.5 points at 89 bid, 91 offered, the trader said.

On Tuesday morning, The Walt Disney Co., Cisco Sytems, Intel Corp., Mayfield Fund, Norwest Venture Partners and VantagePoint Venture Partners announced a newly formed Burbank, Calif.-based venture, MovieBeam, which will provide movies-on-demand service, some in high definition, in 29 major metropolitan areas across the United States, including New York, Los Angeles and Chicago.

Being that Dothan, Ala.-based Movie Gallery has already been under scrutiny due to softness in the video rental industry leading to other sorts of problems - such as expectations of further loan amendments being necessary to avoid non-compliance with covenants - the emergence of the MovieBeam system was able to kickstart a new round of nervous behavior in the market, leading to lower bank levels.

Interestingly, Dallas-based video rental company Blockbuster Inc. held its ground, with term loan levels remaining unchanged at 96 bid, 97 offered despite some seller interest being seen in the market, the trader added.

Georgia-Pacific remains active

Georgia-Pacific Corp.'s recently allocated credit facility continued to grab a lot of focus and see a lot of activity during Tuesday's market hours, according to a trader.

The first-lien term loan B closed out the day unchanged at par 5/8 bid, par 7/8 offered, but traded as high as around 101 early on in the day, the trader said.

Meanwhile, the second-lien term loan closed out the day slightly lower at 101¾ bid, 102¼ offered, down from Monday's closing levels of 102 bid, 102½ offered, the trader added.

Georgia-Pacific's facility freed up for trading on Monday, stealing the spotlight for most of the session, with the term loan B bouncing around between a low of par ½ bid, par ¾ offered and a high of 101 bid, 101¼ offered and the second-lien term loan quoted at 101½ bid, 102 offered for most of the day before making the last minute jump into the 102's.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

Nortel closes

Nortel Networks Inc. closed on its new $1.3 billion credit facility due February 2007 consisting of an $850 million senior secured term loan A (B2/B-) with an interest rate of Libor plus 225 basis points and a $450 million senior unsecured term loan B (B3/B-) with an interest rate of Libor plus 300 basis points, according to a news release.

JPMorgan and Citigroup acted as the lead banks on the deal.

Proceeds are being used to refinance Nortel Networks Ltd.'s outstanding $1.275 billion 6.125% notes due Feb. 15, 2006.

Nortel is a Brampton, Ont., networking solutions company.

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