McJunkin, Sturm, KGen talk emerges; Plastech to remarket next week; VNU lower; GM, Ford higher

By Sara Rosenberg

New York, Jan. 11 - McJunkin Corp., Sturm Foods Inc. and KGen LLC came out with price talk on their credit facilities as all three deals were launched with bank meetings during the Thursday session.

In other primary news, Plastech Engineered Products Inc. came out with timing on the remarketing and restructuring of its credit facility that has been rumored to be in the works for more than a week now.

As for the secondary market, VNU Group BV's U.S. term loan B traded down on news of a repricing, General Motors Corp. traded up on an improved financial outlook and Ford Motor Co. saw better buyers.

McJunkin held a bank meeting on Thursday afternoon to launch its $775 million credit facility into syndication, and at the meeting, price talk on the deal was announced, according to a market source.

The $200 million ABL revolver (Ba1/BB) is being talked at Libor plus 175 basis points and the $575 million term loan B (B2/B+) is being talked in the Libor plus 275 bps area, the source said.

Goldman Sachs and Lehman are the lead banks on the deal, with Goldman the left lead.

Proceeds will be used to help fund Goldman Sachs Capital Partners' acquisition of the company.

McJunkin is a Charleston, W.Va., distributor of industrial and oilfield supplies.

Sturm sets talk

Sturm Foods also announced price talk on its $540 million senior secured credit facility Thursday as it too kicked off syndication with a bank meeting during market hours, according to an informed source.

The company's $20 million revolver and $350 million first-lien term loan were both presented to lenders with talk of Libor plus 275 bps, while the $170 million second-lien term loan was presented with talk of Libor plus 625 bps, the source said.

The second-lien loan carries call premiums of 102 in year one and 101 in year two, the source added.

Deutsche Bank is the lead bank on the deal that will be used for a dividend recapitalization.

Sturm Foods is a Manawa, Wis., provider of dry food products for targeted private label and co-pack markets.

KGen floats talk

KGen released spread guidance on its $400 million credit facility in connection with the deal's launch into syndication Thursday; however, the price talk is fluid with the intention being that it will firm with ratings, according to a market source.

The guidance on the $80 million revolving credit facility, $120 million synthetic letter-of-credit facility and $200 million term loan went out in the Libor plus 200 bps area, the source said.

Morgan Stanley is the lead bank on the deal that will be used to refinance existing debt.

KGen is an operator of merchant generation assets.

Plastech revised deal to surface soon

Plastech Engineered Products' restructured credit facility is set to emerge next week as the company has scheduled a conference call for Tuesday to discuss the transaction and plans on holding one-on-one meetings with accounts on Tuesday and Wednesday, according to a market source.

Sources have previously said that the restructured deal might be "somewhere along the lines" of a $615 million credit facility consisting of a $225 million ABL revolver at Libor plus 200 bps, a $265 million first-lien term loan B at Libor plus 550 bps with call protection of 102 in year one and 101 in year two, and a $125 million second-lien term loan at Libor plus 900 bps with a grid.

The original deal was launched in November 2006 as a $600 million credit facility consisting of a $200 million ABL revolver (B1/BB) talked at Libor plus 200 bps, a $250 million first-lien term loan B (B2/B+) talked at Libor plus 450 to 500 bps and a $150 million second-lien term loan (Caa2/B-) talked at Libor plus 750 to 800 bps.

The term loan B was launched with 101 soft call protection for one year and the second-lien term loan was launched with call protection of 102 in year one and 101 in year two.

As syndication progressed, pricing guidance on the first-lien term loan B narrowed to Libor plus 475 to 500 bps, and then expectations emerged that final pricing would end up at the high end of talk at Libor plus 500 bps.

In addition, the market was anticipating that pricing on the ABL revolver would end up in line with initial talk since the tranche was oversubscribed.

As for the second-lien term loan, talk around mid-December was that the tranche would undergo some significant changes, with pricing expected to come wider than the original guidance and additional call premiums expected to be layered into the deal.

No official word on second-lien changes or final pricing on the first-lien term loan B and ABL revolver ever emerged before the end of 2006.

Goldman Sachs is the lead bank on the deal that will be used to refinance existing debt.

Plastech is a Dearborn, Mich., maker of blow-molded and injection-molded plastic products, primarily for the automotive industry.

VNU softens on repricing

Switching over to the secondary, VNU's U.S. term loan B came under some pressure on Thursday as the company launched a repricing that would cut the spread by 50 bps, according to a trader.

The U.S. term loan B closed the day at par 5/8 bid, 101 offered, down from previous levels of 101 1/8 bid, 101 3/8 offered, the trader said.

Under the repricing proposal, the company is looking to reduce the interest rate on the U.S. paper to Libor plus 225 bps from Libor plus 275 bps.

The Haarlem, Netherlands-based information and media company is also looking to reduce the interest rate on its Euro term loan B to Euribor plus 225 bps from Euribor plus 250 bps.

Citigroup is the lead bank on the repricing.

GM better with improved outlook

General Motors' term loan was a touch stronger during market hours as the company said that it made considerable progress in its North America turnaround and outlined priorities for 2007 regarding its transformation, according to a trader.

The term loan closed the day at par ½ bid, par ¾ offered, up about an eighth of a point, the trader said.

On Thursday, General Motors chairman and chief executive officer Rick Wagoner told securities analysts that the company achieved $9 billion of cost reduction on a running-rate basis by year-end 2006, exceeding its target of $6 billion.

"We expect to reflect at least $6 billion of these savings in our 2006 financials, and then realize the full $9 billion savings in 2007," Wagoner said. "This represents a major first step in achieving our aggressive global target of reducing structural costs to 25% of revenue by 2010."

On the revenues side of things, the company achieved its U.S. retail sales target of 3 million units.

As for 2007, the Detroit-based automaker outlined five key priorities - stay focused on the North America turnaround, continue to drive aggressively in emerging markets, maximize the benefits of running the business globally, build on its comprehensive advanced propulsion strategy and continue to improve business results, especially improved earnings and cash flow.

Ford trades up

Also, on the auto front, Ford was noticeably better during the Thursday trading session as more buyers stepped in on the name, according to a trader.

The Dearborn, Mich.-based automaker's term loan closed the day at 101 bid, 101¼ offered, up about a quarter of a point, the trader said.

RiskMetrics closes

RiskMetrics Group closed on its acquisition of Institutional Shareholder Services Inc., a Rockville, Md.-based provider of proxy voting and corporate governance services to the institutional marketplace, according to a news release.

To help fund the transaction, RiskMetrics got a new $455 million credit facility consisting of a $25 million six-year revolver (Ba3/B+), a $300 million seven-year first-lien term loan B (Ba3/B+) priced at Libor plus 225 bps with a step down to Libor plus 200 bps when leverage is less than 4.0 times, and a $130 million 71/2-year second-lien term loan (B3/CCC+) priced at Libor plus 550 bps with call protection of 102 in year one and 101 in year two.

During syndication, pricing on the first-lien term loan B was reverse flexed from original talk of Libor plus 250 bps with the addition of the step, and pricing on the second lien was reverse flexed from original talk of Libor plus 575 bps.

Bank of America acted as the lead bank on the deal.

RiskMetrics is a New York-based financial risk management firm.

Harrington closes

Harrington Holdings Inc. closed on its $270 million credit facility, according to a news release, consisting of a $45 million six-year revolver priced at Libor plus 250 bps, a $165 million seven-year first-lien term loan priced at Libor plus 250 bps and a $60 million 71/2-year second-lien term loan priced at Libor plus 600 bps.

The second-lien loan carries call premiums of 102 in year one and 101 in year two.

UBS and National City acted as joint lead arrangers on the deal, with UBS the bookrunner.

Proceeds were used to help fund the acquisition of Harrington by The Jordan Co.

Harrington is a Twinsburg, Ohio, multi-channel marketer and distributor of health care products.

Metaldyne closes

Metaldyne Corp. closed on its $670 million credit facility consisting of a $150 million five-year asset-based revolver (Ba3/BB-), a $435 million seven-year term loan (B2/B), a $25 million seven-year final maturity delayed-draw term loan (B2/B) and a $60 million five-year deposit-linked synthetic supplemental letter-of-credit facility (B2/B), according to a news release.

The revolver is priced at Libor plus 200 bps with unused fees that can range from 25 to 50 bps, and the term loan, delayed-draw term loan and letter-of-credit facility are all priced at Libor plus 375 bps.

During syndication, the funded term loan was upsized from $420 million and pricing on all three institutional tranches firmed up at the low end of original guidance of Libor plus 375 to 400 bps.

The delayed-draw term loan will be available for drawing for 59 days after the closing date for the purpose of funding the purchase of senior notes in a tender offer.

The upsizing of the funded term loan was done so as to reduce the amount that will be drawn under the asset-based revolver at close.

JPMorgan and Citigroup acted as the joint lead arrangers on the deal, and JPMorgan, Citigroup and Deutsche Bank acted as the bookrunners. JPMorgan is administrative agent, Citigroup is syndication agent and Deutsche is documentation agent.

Proceeds from the credit facility were used to help back Asahi Tec Corp.'s $1.2 billion acquisition of the company and to replace Metaldyne's existing revolver, letter-of-credit facility, term loan debt and off-balance sheet accounts receivable securitization facility.

Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier, is buying Metaldyne from Heartland Industrial Partners LP and CSFB Private Equity.

Metaldyne is a Plymouth, Mich., supplier of powertrain and chassis systems and components.

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