Aleris, Wynn, TFS, Revlon set talk; Toys 'R' Us tweaks deal; Rexnord upsizes; Spectrum dips in trading

By Sara Rosenberg

New York, July 12 - Aleris International Inc., Wynn Las Vegas, LLC, TFS Acquisition Corp. and Revlon Consumer Products Corp. came out with price talk on their new deals as all of these transactions were launched into syndication on Wednesday.

In other primary news, Toys 'R' Us Inc. reworked spreads on its credit facility and modified call premiums on the senior secured term loan tranche, and Rexnord Corp. upsized its credit facility to compensate for downsizing its bond offering.

Switching to the secondary, Spectrum Brands Inc.'s term loan B softened on news that the company's chief executive officer cancelled an appearance at an upcoming CIBC conference.

Aleris released price talk on its proposed $1.4 billion credit facility (Ba3) as syndication on the deal officially kicked off with a morning bank meeting, according to a market source.

The $750 million ABL revolver was launched with opening talk of Libor plus 150 basis points, the $400 million of dollar-denominated term loan debt was launched with opening price talk of Libor plus 250 basis points and the $250 million equivalent of euro-denominated term loan debt was launched with opening price talk of Libor plus 275 basis points, the source said.

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

Proceeds from the term loans, along with about $400.7 million of revolver borrowings, will be used to help fund the acquisition of Corus Group plc for about €700 million, excluding the assumption of about €28 million of debt as well as certain other liabilities, and to refinance existing debt.

As part of the funding for the acquisition, Aleris also plans on putting in place an approximately $507 million bridge loan that is expected to be replaced with bonds around the September timeframe. In a presentation that was posted with the Securities and Exchange Commission Tuesday, the company said that the contemplated senior notes offering would come in tranches sized at $325 million and €150 million.

Of the total amount of funds, about $837.6 million will be used to finance the actual acquisition, about $232.6 million will be used to repay existing revolver borrowings, about $129.2 million will be used to repay existing 9% notes, about $218.8 million will be used to repay existing 10.375% notes, about $44.8 million will be used to repay Corus Aluminum debt, about $23.2 million will be used to repay the VAW-Imco line of credit, about $38.2 million will be used to pay the tender premium and the remainder will be used for fees and expenses.

Pro forma for the transaction, total secured debt will be 2.5x and total debt will be 3.7x.

Following completion of the proposed transaction, the combined company will have a total of about 8,800 employees and will operate 51 manufacturing locations in North America, South America, Europe and Asia.

Aleris is a Beachwood, Ohio-based manufacturer of rolled aluminum products, aluminum recycler and producer of specification alloys. Corus is a London-based manufacturer, processor and distributor of metal products.

Wynn talk surfaces

Price talk on Wynn's $1.125 billion amended and restated credit facility emerged during the session as the deal was presented to lenders, with the $725 million revolver talked at Libor plus 162.5 basis points and the $400 million term loan B talked at Libor plus 187.5 basis points, according to a market source.

Proceeds will be used to refinance the Las Vegas-based casino company's existing credit facility, including the existing approximately $400 million term loan that is priced at Libor plus 212.5 basis points.

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

TFS price talk

TFS Acquisition also announced spread guidance on its $500 million credit facility as it too launched with a bank meeting during market hours.

The $175 million ABL revolver was presented to lenders with opening talk of Libor plus 175 basis points and the $325 million term loan was presented to lenders with opening talk of Libor plus 275 basis points, a market source said.

Credit Suisse is the lead bank on the deal that will be used to help fund Platinum Equity's acquisition of Textron Inc.'s Fastening Systems business for $630 million in cash plus the assumption of certain liabilities.

TFS is a Troy, Mich., provider of full-service fastening systems to customers in the aerospace, automotive, construction, electronics, industrial equipment and non-automotive transportation industries.

Revlon launches at Libor plus 600 bps

Revlon Inc. operating subsidiary Revlon Consumer Products launched its $75 million term loan B add-on (B3/B-) with a conference call Wednesday at Libor plus 600 basis points, in line with existing term loan pricing, according to a market source.

Citigroup is the lead bank on the deal.

Proceeds from the add-on will be used for general corporate purposes.

In addition, the company is looking to amend its senior secured leverage ratio covenant to reset it at 5.5 to 1:00 through June 30, 2007, stepping down to 5.0 to 1:00 for the remaining term of the facility.

The amendment would also enable the company to exclude up to $25 million of restructuring charges and charges for certain product returns and/or product discontinuances from the definition of EBITDA.

Revlon currently intends to conduct a $75 million equity issuance in late-2006 or early 2007, which would be used to reduce debt at Revlon Consumer Products.

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

Acosta talked 250-275 bps range

Acosta Sales and Marketing Co. is talking its $680 million term loan in the Libor plus 250 to 275 basis points range now that the deal was launched into syndication this past Tuesday, according to a market source.

The $740 million credit facility also contains a $60 million revolver.

Wachovia and Goldman Sachs are the lead banks on the deal that will be used, along with $385 million of mezzanine debt led by Goldman, to help fund the leveraged buyout of the company by AEA Investors from Berkshire Partners.

Acosta is a Jacksonville, Fla., full-service sales and marketing agency.

Toys 'R' Us changes spreads

In other primary happenings, Toys 'R' Us made some modifications to its $1 billion senior secured credit facility (B1/B), including reworking pricing on all tranches and resetting call premiums on the senior secured term loan, according to a market source.

Under the changes, pricing on the $800 million senior secured term loan was flexed up to Libor plus 450 basis points from original talk at launch of Libor plus 375 basis points and call protection was revised to non-callable for one year, callable at 102 in year two and par thereafter, the source said.

Meanwhile, pricing on the $200 million asset-sale bridge loan was changed to an initial rate of Libor plus 300 basis points, with a step up to Libor plus 350 basis points after three months and to Libor plus 400 basis points after another three months, the source continued. Originally, this asset-sale bridge loan was talked at Libor plus 375 basis points.

In addition, the syndicate removed a $200 million accordion feature from the credit agreement and revised some covenants under the asset-sale bridge loan, the source added.

Bank of America, Deutsche Bank and Citigroup are the lead banks on the deal, with Bank of America the left lead.

Proceeds from the credit facility will be used to refinance the Wayne, N.J., specialty toy retailer's existing U.S. bridge loan.

Rexnord ups loan size

Also undergoing some modifications on Wednesday was Rexnord (RBS Global Inc.) as it increased the size of its credit facility by $55 million through upsizings to both the covenant-light term loan tranche and the revolver tranche, according to a market source.

The covenant-light term loan is now sized at $610 million, up from an original size of $580 million, and the revolver is now sized at $150 million, up from an original size of $125 million, as an additional $25 million will be drawn under this tranche, the source said.

On the flip side, the company reduced the size of its bond offering by $55 million by cutting the 10-year senior subordinated note issue talked around 10¾% to $365 million from $420 million. The $785 million bond offering also includes $420 million of eight-year senior notes (size unchanged) talked around 9¼%.

Pricing on the covenant-light term loan remained at Libor plus 250 basis points, where it flexed from original talk of Libor plus 200 basis points in late-June, and pricing on the revolver remained at Libor plus 225 basis points, the source added. The revolver carries a 50 basis point commitment fee.

Merrill Lynch, Credit Suisse, Bear Stearns and Lehman are the lead banks on the now $760 million credit facility (B1/B+), with Merrill Lynch the left lead.

Allocations on the bank deal are expected to go out either late this week or early next week, with the hope being that this Friday will be the day.

Proceeds from the credit facility and the bonds will be used to help fund the leveraged buyout of Rexnord by Apollo Management from The Carlyle Group and management

Under the LBO agreement, Apollo is purchasing RBS Global, Inc., the corporate parent of Rexnord, for $1.825 billion.

Rexnord is a Milwaukee-based manufacturer of highly engineered precision motion technology products, primarily focused on power transmission.

Invensys cuts spreads

Invensys plc reverse flexed pricing on the U.S. portion of its proposed £700 million senior credit facility by 25 basis points, according to a market source.

Both the £100 million of dollar-denominated term loan debt and the £90 million of dollar-denominated bonding facility debt are now priced at Libor plus 200 basis points, down from original talk at launch of Libor plus 225 basis points, the source said.

The total facility package, including the U.S. portion, is divided into a £150 million term loan, a £150 million revolver and a £400 million bonding facility.

The remaining £50 million of term loan debt will be euro denominated, and the remaining £310 million of the bonding facility will be euro and sterling denominated.

The revolver will be dollar, euro and sterling denominated.

Deutsche Bank, Banc of America Securities, HSBC, Lloyds TSB, Morgan Stanley and RBS are the lead banks on the deal, with Deutsche the left lead on the U.S. pieces.

Proceeds from the credit facility will be used to help redeem £243 million in principal amount of the company's outstanding high-yield bonds, to fund the dollar equivalent of £64 million under a debt tender, to repay and cancel £113 million in principal amount of the company's term loan euro- and dollar-denominated facility, to repay and cancel £25 million in principal amount of the company's outstanding bonding facility and to repay and cancel £277 million in principal amount of the company's outstanding second-lien euro- and dollar-denominated loan facilities.

Invensys is a London-based automation, controls and process solutions company.

BWAY firms pricing

BWAY Corp. firmed up pricing on its $295 million senior secured credit facility (Ba3/B+), with the U.S. term loan B ending up at the low end of guidance and everything else ending up at the high end of guidance, according to a market source.

The $190 million seven-year term loan B is priced with an interest rate of Libor plus 175 bps, the tight end of original Libor plus 175 to 200 basis points talk, the source said.

Meanwhile, the $50 million six-year revolver, $5 million Canadian six-year revolver and $50 million six-year term loan C are all priced with an interest rate of Libor plus 200 basis points, the wide end of original Libor plus 175 to 200 basis points talk, the source added.

Deutsche Bank and JPMorgan are joint lead arrangers on the deal that will be used to help fund the acquisition of Industrial Containers Ltd.'s plastic and steel general line pail business, and refinance BWAY's existing credit facility.

BWAY is an Atlanta-based manufacturer of steel and plastic containers for the general line category of the North American container industry.

Spectrum Brands trades lower

Moving to secondary news, Spectrum Brands' term loan B weakened in trading after news surfaced that the company's CEO cancelled an appearance at a CIBC conference, according to a trader.

Apparently, the cancellation was a result of scheduling conflicts, but it made investors nervous about the state of the company, the trader explained.

The term loan B closed the session quoted at par ¼ bid, par ¾ offered, down about an eighth to a quarter of a point, the trader said.

Spectrum Brands is an Atlanta-based consumer products company.

Sourcecorp closes

Apollo Management, LP completed its acquisition of Sourcecorp Inc. in a transaction valued at approximately $475 million, according to a company news release.

To help fund the transaction, Sourcecorp got a new $395 million credit facility consisting of a $75 million six-year revolver (B1/B+) at Libor plus 250 basis points with a 50 basis point commitment fee, a $200 million seven-year first-lien term loan B (B1/B+) at Libor plus 250 basis points and a $120 million 71/2-year second-lien term loan (B3/B-) at Libor plus 700 basis points.

During syndication, the second-lien term loan was downsized by $5 million from $125 million and pricing on the tranche was flexed up from original talk of Libor plus 600 to 625 basis points. In addition, pricing on the revolver and the first-lien term loan B fell out at the high end of original guidance of Libor plus 225 to 250 basis points.

Credit Suisse and UBS Securities acted as the lead banks on the deal.

Sourcecorp is a Dallas-based provider of business process outsourcing solutions and specialized consulting services.

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