Texas Petro firms spread; Aspect second lien needs sponsor help; FleetPride breaks; Six Flags weaker

By Sara Rosenberg

New York, June 23 - In primary happening, Texas Petrochemicals Inc. firmed up pricing on its institutional loan debt at the high end of talk and Aspect Software Inc.'s second-lien term loan has been receiving a somewhat icy reception even with the recently announced changes, as is evident by an offer from the company's sponsor to take down a large chunk of the tranche.

In the secondary, FleetPride Corp. allocated its credit facility on Friday, with the term loan freeing up around the par area and Six Flags Inc.'s bank debt headed lower on news of disappointing numbers and potential covenant problems.

Texas Petrochemicals has finalized pricing on its $280 million of institutional bank loan debt and with the determination on spread out of the way, the deal is anticipated to allocate on Monday, according to a market source.

Pricing on the $70 million 21/2-year prefunded letter-of-credit facility tranche (Ba3/B+) and the $210 million seven-year covenant-light term B (Ba3/B+) has firmed up at Libor plus 250 basis points, the high end of original guidance of Libor plus 225 to 250 basis points, the source said.

The prefunded letter-of-credit facility will convert into a term loan once it is drawn. This tranche was carved out of the term loan that was originally expected to carry a size of $280 million when the deal was relaunched to investors last week.

Syndication had been put on hold after the initial April launch because of problems with the Huntsman Corp. assets that the company is purchasing. Huntsman experienced a fire in its Port Arthur, Texas, olefins manufacturing plant at the end of April, and although this plant is not one of the assets being acquired by Texas Petrochemicals, it does provide the C4 supply to assets being acquired.

As a result, the acquisition agreement was restructured so that Texas Petrochemicals will pay $197.5 million for the Huntsman U.S. butadiene and related MTBE operations at closing, subject to customary adjustments, and an additional payment of $70 million will be made upon the satisfaction of certain milestones related to the resumption of crude C4 supply from Huntsman's Port Arthur, Texas, unit.

The prefunded letter-of-credit facility was incorporated into the credit structure to back the $70 million conditional additional payment.

Texas Petrochemicals' $395 million credit facility also includes a $115 million five-year asset-based revolver that is priced with an interest rate of Libor plus 150 basis points and a 37.5 basis point commitment fee.

Deutsche Bank and Credit Suisse are joint lead arrangers on the term loan and letter-of-credit facility, with Deutsche the left lead. Deutsche and LaSalle are joint lead arrangers on the revolver, with Deutsche the left lead.

Texas Petrochemicals is a Houston-based chemical company.

Aspect second lien

Aspect Software's $385 million six-year second-lien term loan (Caa1/CCC+) does not seem to be receiving much of a reception from lenders even with the recent boost in pricing and addition of an original issue discount, causing Golden Gate Capital, the company's sponsor, to offer to take down up to $185 million of the tranche, according to a market source.

The second-lien loan is priced with an interest rate of Libor plus 700 basis points, is being offered at an original issue discount of 99 and carries call protection of 102 in year one and 101 in year two. Recently, the paper had seen a flex up from original talk of Libor plus 600 basis points with the addition of the original issue discount.

Aspect Software's $1.16 billion credit facility also contains a $725 million five-year first-lien term loan B (B2/B+) and a $50 million revolver (B2/B+), with both of theses tranches priced at Libor plus 300 basis points. Pricing on this first-lien paper was also flexed recently, moving up from original talk of Libor plus 250 basis points. At the same time as the flex, 101 call protection for one year was added to the first-lien term loan B.

There's no talk of Golden Gate offering to hold on a to a chunk of first-lien term loan B paper seemingly because they're not as worried about the first lien getting done as they are about the second lien getting done, the source explained.

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

Proceeds will be used to refinance existing bank debt and to fund a dividend payment.

Aspect Software is a Westford, Mass., provider of call center software and equipment.

National Mentor upsizes

National Mentor Holdings Inc. increased the size of its term loan as it decided to reduce the size of its bond offering, according to a market source.

The term loan is now sized at $335 million, up from an original size of $300 million, while pricing was left unchanged from initial talk of Libor plus 250 basis points, the source said.

On the flip side, the bond offering was downsized to $180 million from an original size of $215 million.

National Mentor's now $460 million credit facility (B1/B) also contains a $125 million revolver with an interest rate of Libor plus 250 basis points.

JPMorgan, UBS Securities and Bank of America are the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the credit facility, along with bond proceeds, will be used to fund the buyout of National Mentor by management and Vestar Capital Partners, refinance the company's existing term loan B and revolving credit facility, and fund a tender offer for its 9 5/8% senior subordinated notes due 2012.

Management and Vestar Capital are buying National Mentor from Madison Dearborn Partners and other stockholders. Vestar has committed to provide $258 million in equity for the transaction.

National Mentor is a Boston-based provider of home and community-based human services for individuals with developmental disabilities and acquired brain injuries, as well as for at-risk youth.

Northeast Biofuels firms pricing

In other primary doings, Northeast Biofuels finalized pricing on its $217 million credit facility at Libor plus 325 basis points, according to a market source.

The facility consists of a $12 million revolver, a $65 million synthetic letter-of-credit facility and a $140 million term loan B (B1/B+).

The term loan B carries call protection of 101 in the first two years.

Goldman Sachs is the lead bank on the deal.

Proceeds will be used to build a 100 million gallon ethanol plant in Upstate New York.

FleetPride frees to trade

Switching to trading, FleetPride hit the secondary on Friday with its $160 million covenant-light term loan quoted at par bid, no offers, according to a market source.

The term loan is priced with an interest rate of Libor plus 300 basis points. During syndication, pricing on the tranche was increased from Libor plus 250 basis points and a maintenance covenant was added to the structure.

FleetPride's $200 million credit facility (B2/B+) also contains a $40 million revolver with an interest rate of Libor plus 250 basis points.

Bank of America and Deutsche Bank are the lead banks on the deal.

Proceeds are being used to back the already completed acquisition of FleetPride by Investcorp, Banc of America Capital Investors and members of management from an investor group led by Aurora Capital Group and including Brentwood Associates and certain pension and endowment funds.

FleetPride is a Woodlands, Texas, supplier of truck and trailer parts service.

Six Flags off on numbers, warning

Six Flags' bank debt traded lower on Friday following news that recent revenues were somewhat disappointing, prior adjusted EBITDA guidance may be hard to meet and financial covenants under its credit facility may be violated, according to a trader.

The bank debt closed the session quoted at par bid, par ½ offered but fell off to as low as 99¼ bid, par offered early on in the day, the trader said. Prior to Friday, the bank debt was being quoted in the par 5/8 bid, 101 offered type of range.

On Thursday night, Six Flags announced that for the period through May 31, total revenues were up about 1%, or $2.6 million, compared to the same period last year, driven by a strong increase in guest spending and offset by a decline in attendance.

For the period through June 18, which captures the most recent weekend in June, total revenues were down about 1%, or $3.2 million, compared to the prior-year period, and attendance was down about 1.3 million, or 13%, driven primarily by reduced season pass attendance.

Based on the performance to date, recent attendance trends and a decision to increase cash operating expenses by $15 million, the company anticipates that reaching the prior adjusted EBITDA guidance will be "extremely difficult," the company news release said.

The New York-based regional theme park company also said that it is at risk of not complying with certain financial covenants in its credit agreement and is in discussions with the agent bank, with the intention being to seek amendments to those covenants.

In addition, the company announced that it plans to explore potential strategic options with respect to six of its properties - Six Flags Darien Lake outside Buffalo, N.Y., Six Flags Waterworld in Concord, Calif., Six Flags Elitch Gardens in Denver, Wild Waves and Enchanted Village outside Seattle, Six Flags Splashtown in Houston, and Six Flags Magic Mountain and Hurricane Harbor near Los Angeles.

Lakes Entertainment closes

Lakes Entertainment, Inc. closed on its new $105 million four-year credit facility that carries an interest rate of Libor plus 625 basis points, according to a company news release.

Banc of America Securities, LLC acted as lead arranger and bookrunner on the deal.

Security is substantially all of the material assets of the company.

Proceeds are being used to pay off the existing financing facility in the amount of $25 million from an affiliate of Prentice Capital Management, LP, to fund its remaining obligation to the Pokagon Band of Potawatomi Indians in the approximate amount of $22.5 million, to continue to move forward with other casino development projects and for working capital.

Lakes is a Minnetonka, Minn.-based developer and manager of casinos and related entertainment facilities in various gaming jurisdictions, including Indian-owned casinos.

Cenveo closes

Cenveo Corp. completed its tender offer and consent solicitation for about $339.5 million of its 9 5/8% senior notes due 2012, according to a company news release.

To help fund the tender offer, Cenveo got a new $525 million credit facility (BB-) consisting of a $200 million revolver with an interest rate of Libor plus 175 basis points and a $325 million term loan with an interest rate of Libor plus 200 basis points.

Bank of America and Lehman Brothers acted as the lead banks on the deal, with Bank of America the left lead.

Cenveo is a Stamford, Conn., print and visual communications provider.

ArvinMeritor closes

ArvinMeritor, Inc. closed on its new $1.15 billion senior secured credit facility (Ba1/BB+/BB+) consisting of a $980 million five-year revolver and a $170 million six-year term loan B, according to a company news release.

The revolver and the term loan B are both priced with an interest rate of Libor plus 175 basis points. The revolver carries a 37.5 basis point commitment fee.

During syndication, the revolver size was increased from $850 million and the term loan B size was decreased from $200 million.

JP Morgan Securities Inc. and Citigroup Global Markets Inc. acted as the lead banks on the deal that was used to replace the company's existing revolver.

ArvinMeritor is a Troy, Mich., supplier of a broad range of integrated systems, modules and components to the motor vehicle industry.

TransDigm closes

TransDigm Inc. closed on its new $800 million senior secured credit facility (B1/B+/BB-) consisting of a $150 million six-year revolver and a $650 million seven-year term loan B, according to a company news release.

Both the revolver and the term loan are priced with an interest rate of Libor plus 200 basis points, and the revolver carries a 50 basis point commitment fee. Pricing on the tranches came at the low end of original guidance of Libor plus 200 to 225 basis points.

Credit Suisse and Bank of America acted as the lead banks on the deal, with Credit Suisse the left lead.

Proceeds were used to help repay existing senior secured and unsecured bank debt and to fund a tender for the company's 8 3/8% senior subordinated notes.

TransDigm is a Cleveland-based designer, producer and supplier of highly engineered aircraft components for commercial and military aircraft.

Interline Brands closes

Interline Brands Inc. closed on its new $330 million credit facility (Ba3/BB) consisting of a $100 million seven-year term loan, a $130 million seven-year delayed-draw term loan and a $100 million six-year revolver, according to a company news release.

All three bank debt tranches are priced with an interest rate of Libor plus 175 basis points.

During syndication, the fund term loan was reduced in size from $125 million and the company's bond offering was increased by the equivalent amount.

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

Proceeds from the credit facility and the notes were used to refinance the company's existing credit facility and to repurchase its outstanding 11½% senior subordinated notes due 2011. The delayed-draw term loan will be used to finance the $127.5 million acquisition of American Sanitary Inc. that is expected to close in July.

There is no fee for the delayed-draw term loan since it will be funded relatively quickly.

Interline is a Jacksonville, Fla., distributor and direct marketer of specialty maintenance, repair and operations products.

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