AWAS talk emerges; Data Transmission shifts funds; Dunkin' upsizes, cuts spreads; Goodyear trades up

By Sara Rosenberg

New York, Feb. 16 - Price talk on AWAS Aviation Holdings LLC's $2 billion-plus credit facility surfaced on Thursday as the deal was launched to investors via a bank meeting during market hours.

Also, Data Transmission Network Corp. launched its credit facility with reconfigured first- and second-lien term loan tranche sizes as investor appetite for the first-lien loan was too strong to ignore.

And, Dunkin' Brands Inc. decided to increase the size of its heavily oversubscribed term loan B, while at the same time reducing pricing on the upsized tranche as well as on its revolver.

Meanwhile, in the secondary, Goodyear Tire & Rubber Co.'s second-lien loan squeaked out small gains by the end of the session as financial results were not as bad as people were expecting.

AWAS Aviation came out with opening price talk and second-lien call protection premiums on Thursday as the company presented its $2.05 billion credit facility to investors, according to a market source.

The company's $1.8 billion first-lien term loan was launched to investors with price talk of Libor plus 175 basis points and the company's $250 million second-lien term loan was launched to investors with price talk of Libor plus 650 basis points, the source said.

In addition, the second-lien term loan is being marketed with call protection of 102 in year one and 101 in year two, the source added.

JPMorgan is the lead bank on the deal that will be used to help fund Terra Firma's purchase of AWAS from Morgan Stanley for $2.5 billion.

AWAS Aviation is a Seattle-based aircraft leasing company.

Data Transmission tweaks tranching

Also on the new-deal front, Data Transmission opted to launch its credit facility with a larger-than-expected first-lien term loan and a smaller-than-expected second-lien term loan being that the first lien was very oversubscribed pre-bank meeting from existing lender commitments, according to a market source.

The first-lien term loan (B+) was presented to investors on Thursday with a size of $175 million, up from the originally anticipated size of $135 million that the deal was being talked at prior to launch, the source said.

Meanwhile, the second-lien term loan (B-) was presented to investors with a size of $60 million, down from the originally anticipated size of $100 million that the deal was being talked at prior to launch, the source added.

And, although the second-lien term loan did not see as overwhelming a reception pre-bank meeting as the first-lien term loan, there were still plenty of orders placed on the tranche before the official start of syndication. In fact, when the tranche was still sized at $100 million, it was said by some sources that the book was already about three quarters of the way there.

The $270 million credit facility (overall size unchanged from prior expectations) also contains a $35 million revolver (B+).

Goldman Sachs is the lead bank on the deal that will be used to refinance existing debt and fund a dividend payment.

Data Transmission Network is an Omaha, Neb., provider of real-time information to agriculture, refined fuels, commodities trading and weather impacted businesses.

Dunkin' reworks structure

Still on the subject of tweaks, Dunkin' Brands upsized its term loan B and lowered pricing by 25 basis points across the entire credit facility complex being that the deal is massively oversubscribed, according to a market source.

The term loan B is now sized at $850 million, up from the original size of $700 million, and pricing on the paper was reverse flexed to Libor plus 250 basis points from original price talk at launch of Libor plus 275 basis points, the source said.

To compensate for the increased amount of term loan B funds, the company decreased the size of its funded bridge loan, the source explained.

In addition, Dunkin' also reverse flexed pricing on its $150 million revolver to Libor plus 250 basis points from original price talk at launch of Libor plus 275 basis points, the source said. The size of this tranche was left unchanged.

Proceeds from the now $1 billion credit facility (B2/B+) will be used help fund the leveraged buyout of Dunkin' by Bain Capital Partners, The Carlyle Group and Thomas H. Lee Partners.

Under the transaction agreement, the sponsors will acquire Dunkin' Brands for $2.425 billion in cash from Pernod Ricard SA.

JPMorgan and Lehman are the lead banks on the credit facility, with JPMorgan the left lead.

Dunkin' Brands is a Canton, Mass., quick service restaurant franchisor.

USI sets talk

Turning back to price talk news, USI Holdings Corp. came out with an opening spread of Libor plus 225 basis points on both its $100 million revolver and $210 million term loan B, according to a market source.

Proceeds from the $310 million credit facility (B1), which launched with a bank meeting on Wednesday, will be used to refinance existing bank debt and for general corporate purposes.

JPMorgan is the lead bank on the deal.

USI is a Briarcliff Manor, N.Y., distributor of insurance and financial products and services to businesses.

Goodyear stronger

Moving on to trading, Goodyear's second-lien loan was up about an eighth of a point on the day as fourth-quarter and full-year financials were not as bad as the market had been expecting since the company pre-announced numbers at the end of January that warned about the impact of hurricanes in the U.S. Gulf Coast region and rising raw material costs, according to a trader.

The second-lien loan closed the session quoted at 101¼ bid, 101¾ offered, the trader said.

For the fourth quarter, Goodyear reported sales of $4.9 billion, operating income of $226 million compared with $238 million in the 2004 quarter, and a net loss of $51 million, or $0.29 per share, compared with net income of $125 million, or $0.62 per share, last year.

Operating income for the fourth quarter includes a $15 million impact from the hurricanes in the U.S. Gulf Coast region.

For the full year, Goodyear reported net sales of $19.7 billion, up 7% from $18.4 billion in 2004, and net income of $228 million, or $1.16 per share, compared with $115 million, or $0.63 per share, in 2004.

For the year, raw material costs increased 11%, or about $550 million, compared to 2004.

Goodyear is an Akron, Ohio-based tire company

Movie Gallery bid rises

Movie Gallery Inc.'s term loan has started to see some improvement on the bid side as investors have had a few days to digest the news of a recently launched rival - MovieBeam Inc., according to a trader.

The term loan closed out Thursday's session quoted at 90 bid, 91 offered, up 1 point on the bid side but unchanged on the offer side, 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 U.S., including New York, Los Angeles and Chicago.

Since 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 spur on a new round of investor nervousness, leading to an approximately 2.5 point drop in bank levels to 89 bid, 91 offered immediately following the news.

ISP Chemco closes

ISP Chemco Inc. closed on its new $1.2 billion senior secured credit facility (Ba3/BB-) consisting of a $950 million term loan B with an interest rate of Libor plus 175 basis points and a $250 million revolver, according to a company news release.

During syndication, pricing on the term loan B was reverse flexed from Libor plus 200 basis points.

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

Proceeds were used to fund 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, and to refinance existing bank debt.

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.

Covalence closes

Apollo Management LP completed its purchase of Tyco International Ltd.'s plastics and adhesives business, which was renamed Covalence Specialty Materials, according to a news release.

To help fund the LBO, Covalence got a new $700 million credit facility consisting of a $175 million six-year revolver (Ba3/B+) at Libor plus 225 basis points with a 50 basis point commitment fee, a $350 million seven-year term loan (Ba3/B+) at Libor plus 175 basis points and a $175 million second-lien term loan (B2/B-) at Libor plus 325 basis points.

During syndication, the term loan B was upsized from $325 million and pricing was reverse flexed from original price talk at launch of Libor plus 225 basis points.

The second-lien term loan was added to the capital structure at the time of the term loan B upsizing. Initially, price talk on this tranche was set at Libor plus 350 basis points but it came in by 25 basis points on strong demand.

Covalence decided to upsize its term loan B and add the second-lien term loan to compensate for the decision to downsize its bond offering by $230 million to $265 million. The company's originally proposed $200 million tranche of second-lien senior secured floating-rate notes was removed form the bond structure altogether, taking form in the second-lien term loan and the incremental term loan B debt. Furthermore, there was a $30 million working capital adjustment to the financing.

Bank of America, Credit Suisse, Merrill Lynch and Morgan Stanley acted the lead banks on the $700 million credit facility, which all in all was increased from an original size of $500 million.

Covalence is a producer of trash bags, stretch film and plastic sheeting, as well as a leading global producer of duct tape.

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