Intelsat, PanAmSat, Gleason term loans free to trade atop par; Coleto boosts second-lien spread

By Sara Rosenberg

New York, July 6 - Intelsat Ltd., PanAmSat Holding Corp. and Gleason Corp. all hit the secondary during Thursday's market hours, and all three deals saw levels on their institutional term loans fall out in the par-plus context.

Meanwhile, in primary happenings, Coleto Creek LP increased pricing on its second-lien term loan and sweetened the original issue discount on its first-lien institutional bank debt.

Intelsat and PanAmSat freed for trading, with Intelsat's amended $346 million term loan B quoted at par 1/8 bid, par 5/8 offered and PanAmSat's amended $1.639 billion term loan B quoted at par ¼ bid, par 5/8 offered, according to a trader.

At the end of May, both companies launched amendments to their credit facilities under which Intelsat's and PanAmSat's term loan B's were turned into covenant-light structures, maturities were extended and, later on in the amendment process, pricing was raised.

Through the amendment, pricing on both Intelsat's $300 million revolver and $346 million term loan B was increased by 50 basis points to Libor plus 225 basis points.

Furthermore, the amendment increased pricing on PanAmSat's $250 million revolver and $356 million term loan A by 37.5 basis points to Libor plus 212.5 basis points, and pricing on its $1.639 billion term loan B by 25 basis points to Libor plus 250 basis points.

By comparison, under the original proposal the amendment would have left existing pricing grids on both the Intelsat and the PanAmSat credit facilities unchanged.

As for changes to tenor, for Intelsat, the amendment extended the maturity on its revolver to six years and the maturity on its term loan B to seven years.

For PanAmSat, the amendment extended the maturities on its revolver and term loan A to six years and the maturity on its term loan B to 7½ years.

Citigroup acted as the lead bank on the amendments for both credit facilities.

The amendments were done in connection with the merger of Intelsat and PanAmSat, which was completed on Monday, under which Intelsat acquired PanAmSat for $25 per share in cash, or $3.2 billion.

Intelsat is a Pembroke, Bermuda, satellite company. PanAmSat is a Wilton, Conn., satellite company.

Gleason breaks

Gleason's credit facility also started trading on Thursday, with the $165 million seven-year first-lien term loan quoted at par ¼ bid, par ¾ offered, according to a trader.

The term loan is priced with an interest rate of Libor plus 250 basis points. During syndication, the tranche was upsized from $150 million.

Gleason's $363 million dollar- and euro-denominated senior secured credit facility also contains a $40 million six-year revolver priced at Libor plus 225 basis points, a €35 million six-year revolver priced at Libor plus 225 basis points, a €50 million first-lien term loan priced at Libor plus 250 basis points and a $50 million 71/2-year second-lien term loan priced at Libor plus 550 basis points.

During syndication, the second-lien term loan was downsized from $65 million when the first-lien term loan was upsized.

UBS and Dresdner are the lead banks on the deal, with UBS the left lead.

Proceeds will be used to help fund a management and Gleason Foundation led buyout of the company.

Gleason is a Rochester, N.Y., designer, manufacturer and seller of machines that make, test and finish gears used in drive shafts.

Coleto tweaks deal

Coleto Creek made a second round of changes to its in-market credit facility, this time flexing pricing higher on the second-lien term loan tranche and increasing the original issue discount on the first-lien institutional bank debt, according to a market source.

The $200 million second-lien term loan, which is unrated, is now priced with an interest rate of Libor plus 400 basis points, up from original price talk of Libor plus 300 basis points, the source said.

The second-lien original issue discount of 250 basis points and 101 call protection for one year were unchanged.

This second-lien term loan was added to the capital structure during syndication in late-June as the company opted to downsize its first-lien term loan by the equivalent amount, while leaving all other first-lien terms unchanged.

However, now, Coleto has modified the original issue discount on its $735 million first-lien term loan (B1/B+) as well as on its $170 million synthetic letter-of-credit facility (B1/B+), increasing the OID to 100 basis points from 50 basis points, the source continued.

Pricing on the first-lien term loan (which had been downsized from $935 million when the second-lien was added) and the synthetic letter of credit facility was left unchanged at Libor plus 275 basis points, and the 101 call protection for one year was also left alone.

Coleto Creek's $1.165 billion credit facility also contains a $60 million revolver (B1/B+) that is priced at Libor plus 275 basis points.

Credit Suisse and Goldman Sachs are joint lead arrangers on the deal that will be used to help fund American National Power Inc.'s $1.14 billion acquisition of the 632 megawatt coal-fired Coleto Creek Power generation facility in Goliad County, Texas, from Topaz Power Group.

In addition, American National's parent company, International Power plc, will contribute $288 million toward the purchase that will come from the current liquid resources.

The majority of Coleto Creek's output is forward contracted to 2009. Additional forward contracts have been agreed and will be put in place through to 2013 for about 50% of the plant's output. The credit support required for these forward hedging arrangements will be provided within the financing facility.

International Power is a London-based independent electricity generating company, and American National Power is the company's wholly owned subsidiary with operations in the United States.

Lucite upsizes

Lucite International Ltd. carved out a euro tranche and increased the size of its term loan B after moving some funds out of its pay-in-kind financing, according to a market source.

The seven-year term loan B now carries a total size of $962 million, up from an original size of $900 million, and is divided into a $655 million tranche with an interest rate of Libor plus 275 basis points and a €240 million tranche with pricing still to be determined, the source said.

Originally, it was anticipated that the entire term loan B would be dollar denominated.

Meanwhile, the PIK financing was downsized to €260 million from €300 million to compensate for the term loan B upsizing, the source added.

This change in size to the term loan B is the second time since coming to market that the transaction has seen some modification.

When the deal was first launched in June, the B loan had a covenant-light structure, but, during the syndication process, the covenant package was changed to a more conventional structure as two maintenance covenants were added - a gross debt to EBITDA test and an EBITDA to net cash interest coverage test.

However, with the addition of the two maintenance covenants, the company went ahead and removed one incurrence covenant - net cash pay EBITDA of 41/2x.

Lucite's $1.062 billion credit facility (B1/B+) also contains a $100 million six-year revolver with an interest rate of Libor plus 225 basis points.

Merrill Lynch is the lead bank on the deal that will be used to fund a recapitalization of the company and to repay a shareholder loan.

Lucite is a United Kingdom-based designer, developer and manufacturer of acrylic-based products.

Kaiser closes

Kaiser Aluminum Corp. closed on its $250 million exit financing credit facility as it emerged from Chapter 11 bankruptcy protection, according to an 8-K filed with the Securities and Exchange Commission Thursday.

The facility consists of a $200 million five-year revolver with an initial interest rate of Libor plus 175 basis points and a $50 million delayed-draw term loan with an interest rate of Libor plus 425 basis points.

The term loan is delayed draw for 30 days and is available to Kaiser Aluminum Fabricated Products, LLC.

JPMorgan acted as lead arranger, bookrunner, syndication agent and administrative agent, and CIT Group/Business Credit Inc. acted as co-arranger.

Kaiser is a Houston aluminum company.

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