Iridium Satellite reworks deal; Revlon trades down on projected financials

By Sara Rosenberg

New York, July 10 - Iridium Satellite LLC overhauled its credit facility on Monday, increasing spreads on all tranches, adding call premiums and an original issue discount to the first-lien term loan B and sweetening second-lien call premiums.

Meanwhile, in secondary happenings, Revlon Inc.'s term loan B softened as the company announced preliminary second-quarter numbers and full-year outlook that left investors somewhat disappointed.

Iridium Satellite made a round of changes to its $235 million credit facility during market hours, flexing pricing higher on all tranches by a pretty significant amount, adding two years of soft call protection and an original issue discount to the first-lien term loan B and revisiting second-lien call protection terms, according to market sources.

With the modifications, the $175 million first-lien term loan B (B3) is now priced with an interest rate of Libor plus 400 basis points, up from original price talk at launch of Libor plus 325 basis points, sources said.

In addition, the term loan B is now being issued to investors at 991/2, as opposed to par as was originally contemplated, and soft call protection of 102 in year one and 101 in year two was added to the tranche.

The company's $10 million revolver (B3) also saw a flex up in pricing, moving to Libor plus 400 basis points from original talk at launch of Libor plus 325 basis points, sources continued.

As for the company's $50 million second-lien term loan (Caa1), it saw the largest pricing increase of the bunch as the spread was changed to Libor plus 800 basis points from original talk at launch of Libor plus 650 basis points, sources said.

Furthermore, the second-lien term loan's call premiums were changed to non-callable for one year and then at 102 in year two and 101 in year three, compared to original call protection of 102 in year one and 101 in year two, sources concluded.

Lehman and Morgan Stanley are the lead banks on the deal, with Lehman the left lead.

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

Iridium is a Bethesda, Md., provider of satellite voice and data solutions.

Revlon weaker on numbers

Switching to the secondary, Revlon's term loan B headed lower in trading as the company announced preliminary results for the second quarter and provided its outlook for 2006 and beyond, according to a trader.

The term loan B closed the session quoted at 102½ bid, 103 offered, down half a point from Friday's levels of 103 bid, 103½ offered, the trader said.

For the second quarter, the company expects adjusted EBITDA to be a loss of about $30 million versus adjusted EBITDA of $24 million in the second quarter of 2005, operating loss of about $55 million versus essentially break-even operating results in the same period last year, and net loss to be approximately $95 million versus a net loss of $36 million in the second quarter of 2005.

For full-year 2006, the company anticipates adjusted EBITDA to be approximately even with or somewhat below the 2005 level of $167 million.

"Our long-term strategy is focused on actions to build all of our great brands, reduce costs and create sustainable value," said Jack Stahl, president and chief executive officer, in the release.

"While 2006 Adjusted EBITDA will be lower than originally projected, largely due to a significant shortfall associated with the launch of Vital Radiance, our overall business continues to make progress. In this environment, we believe we are taking the right actions for the long-term to grow our sales, including capitalizing on the Revlon brand across categories, while working aggressively to reduce our cost structure and improve our margins. We are confident that our financial results in 2007 and beyond will benefit meaningfully from these actions," Stahl added in the release.

Revlon also announced on Monday that it is planning on getting a $75 million add-on to its term loan B to strengthen its capital structure and improve its financial flexibility.

Citigroup is the lead bank on the deal that will launch with a conference call on Wednesday.

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

Foundation Coal closes

Foundation Coal Holdings Inc. closed on its new $835 million five-year senior secured credit facility consisting of a $500 million revolver and a $335 million term loan A, according to a company news release.

Both the revolver and the term loan A are priced with an initial interest rate of Libor plus 125 basis points.

Proceeds were used to refinance the company's existing credit facility consisting of $335 million in term loans and a $350 million revolver.

Citigroup acted as lead arranger, bookrunner, syndication agent and administrative agent. Bank of America, LaSalle Bank, PNC Bank and The Royal Bank of Scotland acted as co-documentation agents.

Foundation Coal is a Linthicum Heights, Md.-based coal producer.

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