Metavante sets discount; Texas Competitive selling down B-3; CommScope talk emerges

By Sara Rosenberg

New York, Oct. 29 - Metavante Corp. firmed up the original issue discount on its term loan and is hoping to allocate the transaction in the near future, and Texas Competitive Electric Holdings Co. LLC (TXU) put its term loan B-3 up for sale.

Also in the primary, CommScope Inc. came out with price talk on its term loan B as the tranche was launched to retail investors during Monday's market hours.

Metavante set the original issue discount on its $1.75 billion seven-year term loan at 971/2, according to a market source, who said that allocations are expected in the next couple of days.

Previously, the discount was labeled as still to be determined.

Pricing on the term loan is Libor plus 175 basis points, with a single step down based on the company meeting a leverage test.

Metavante's $2 billion senior secured credit facility (Ba2/BB) also includes a $250 million six-year revolver priced at Libor plus 162.5 bps, with a 50 bps commitment fee.

There is a $350 million accordion feature.

If the interest rate applicable to any incremental facility is more than 25 bps higher than the term loan pricing, then the term loan pricing will be increased so that it is 25 bps lower than the incremental pricing.

The credit facility contains a consolidated leverage ratio that opens at 5 to 1 and slides down to 3.5 to 1 over time. The covenant will apply starting with the fiscal quarter ending March 31, 2008.

JPMorgan, Morgan Stanley, Lehman Brothers and Robert W. Baird & Co. are the lead banks on the deal.

Proceeds will be used to help fund the company's spinoff from Marshall & Ilsley Corp.

Under the spinoff, Marshall & Ilsley shareholders will receive one share of Marshall & Ilsley stock as well as one share of Metavante stock for every three shares of Marshall & Ilsley stock held.

In addition, Warburg Pincus, a private equity investor, will invest $625 million to obtain a 25% equity stake in Metavante.

The spinoff was approved by shareholders at a special meeting held on Oct. 25, and closing is anticipated to take place on Nov. 1.

Metavante is a provider of banking and payments technologies.

Texas Competitive syndicating B-3

The loan syndicate on Texas Competitive Electric Holdings' credit facility is now taking orders on a minimum $3 billion portion of the $6 billion seven-year term loan B-3 from investors at par, according to a market source.

The term loan B-3 is priced at Libor plus 350 bps and is non-callable for three years.

Previously, the only tranche under the company's already funded $24.5 billion senior secured credit facility (Ba3/B+) that was being syndicated was the $7 billion seven-year term loan B-2 that is priced at Libor plus 350 bps at 993/4, with soft call protection of 103 in year one, 102 in year two and 101 in year three.

Syndication on the term loan B-2 wrapped up last week after the original issue discount was tightened from initial guidance in the 99½ area, and the deal allocated on Wednesday.

Being that the B-2 was well oversubscribed, and that Most-Favored-Nation language was added to the term loan B-3 the other week, speculation has been circulating that the B-3 would be coming to market soon.

Word around the market last week was that the term loan B-3 has already received some bids and indications of interest from potential lenders, but that the syndicate was waiting for the term loan B-2 to settle a little bit so that the market wouldn't be overloaded with paper.

Books on the term loan B-3 close on Tuesday at 3 p.m. ET, with allocation after that.

The final allocation amount will be subject to market demand.

The amount of term loan B-3 debt not sold at this time will be subject to the existing Most-Favored-Nation language, which protects buyers from price pressure in the event that the arrangers sell part or all of the loans that have remained on their books in the future at prices below the original issue discount, the source added.

Texas Competitive's credit facility also includes a $4.1 billion seven-year final maturity delayed-draw term loan, a $1.25 billion seven-year deposit letter-of-credit facility, a $2.7 billion six-year revolver and a $3.45 billion seven-year term loan B-1, with all of these tranches, which have not yet been syndicated, priced at Libor plus 350 bps as well.

The revolver has a commitment fee of 50 bps.

Of the total delayed-draw term loan amount, $2.15 billion was funded at close. The additional $1.95 billion of delayed-draw term loan commitments in place are to ensure available liquidity to fund the construction of new plants.

The delayed-draw term loan has an undrawn fee of 125 bps for the first year and 150 bps after that.

Under the facility, the company must maintain a maximum secured leverage ratio of 7.25 to 1 beginning on Sept. 30, 2008.

Citigroup, JPMorgan, Goldman Sachs, Lehman Brothers, Morgan Stanley and Credit Suisse are the joint lead arrangers and bookrunners on the deal, with Citi administrative agent, JPMorgan syndication agent, and Credit Suisse, Goldman, Lehman and Morgan Stanley co-documentation agents.

Proceeds from the credit facility were used to help fund the recently completed leveraged buyout of TXU Corp. by an investor group led by Kohlberg Kravis Roberts & Co. and Texas Pacific Group for $69.25 per share. The transaction was valued at $45 billion.

As of June 30, Texas Competitive's total senior secured debt was 4.8 times pro forma adjusted last-12-months EBITDA and total debt was 6.9 times.

In connection with the buyout, TXU, a Dallas-based energy company, changed its name to Energy Future Holdings Corp.

CommScope sets price talk

CommScope held a bank meeting in New York on Monday to kick off syndication on its proposed $1.4 billion term loan B to investors, and in connection with the launch, price talk surfaced, according to a buyside source.

The term loan B was presented to lenders with talk of Libor plus 250 bps, the source said.

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

The term loan B is part of a $2.55 billion senior secured credit facility (Ba3/BB-) that also includes a $400 million revolver and a $750 million term loan A, with both of these tranches talked at Libor plus 225 bps.

A bank meeting to launch the pro rata potion of the deal was already held in Charlotte, N.C., on Oct. 18.

Originally, based on filings with the Securities and Exchange Commission, the facility was expected to consist of a $2.3 billion seven-year term loan and a $250 million six-year revolver, with pricing ranging from around Libor plus 175 bps to Libor plus 275 bps, depending on the company's debt ratings.

Security is substantially all of the company's domestic assets.

Proceeds will be used to help fund the acquisition of Andrew Corp. for $15.00 per share, comprised of $13.50 per share in cash and an additional $1.50 per share in either cash, CommScope common stock, or a combination of cash and common stock, at CommScope's option. The deal is valued at $2.6 billion.

Following the close, CommScope plans to reduce leverage by continuing to grow cash flow, by improving operational performance and by identifying and selectively divesting non-core or underperforming assets during the first year after completion.

CommScope is a Hickory, N.C., provider of infrastructure services for communication networks. Andrew is a Westchester, Ill., designer, manufacturer and deliverer of equipment and services for the communications infrastructure market.

Susser subscribed

Susser Holdings Corp.'s $195 million senior secured credit facility has "filled out quickly" even with the syndicate opting not to hold a bank meeting to launch the transaction, according to a market source.

The facility consists of a $105 million term loan and a $90 million revolver.

Bank of America, Merrill Lynch, Wachovia and BMO Capital Markets are the lead banks on the deal.

Proceeds from the credit facility, along with $150 million in high-yield bonds, will be used to help fund the acquisition of Town & Country Food Stores.

Other acquisition funding will come from about $40 million in lease financing and $46.7 million in cash on hand.

Pro forma for the transaction, debt to EBITDA will be 4.1 times and adjusted EBITDA to interest expense will be 2.4 times.

Susser is buying Town & Country in an all-cash transaction valued at about $361 million, subject to certain closing adjustments and before transaction costs and expenses.

Corpus Christi, Texas-based Susser and San Angelo, Texas-based Town & Country are both convenience store operators.

Basell London SMA meeting Tuesday

Basell's senior managing agent bank meeting for European investors will take place on Tuesday in London, according to a market source.

As was previously reported, a senior managing agent bank meeting for U.S. investors will take place in New York on Wednesday,

The company's $14 billion senior secured credit facility consists of a $13 billion seven-year euro and U.S. term loan and a $1 billion six-year euro and U.S. revolver.

The term loan can be increased by up to $750 million, equal to the amounts outstanding under securitization or asset-backed facilities of Lyondell and its subsidiaries.

Citigroup, Goldman Sachs, Merrill Lynch and ABN Amro are the joint lead arrangers, bookrunners and global coordinators on the credit facility.

Proceeds will be used to help fund the acquisition of Lyondell Chemical Co. for $48.00 per common share in an all-cash transaction with a total enterprise value of about $19 billion, including the assumption of debt.

Other financing will come from $7 billion or the euro equivalent of senior secured second-lien notes and/or senior unsecured notes in a Rule 144A or other private placement, according to filings with the Securities and Exchange Commission.

Basell is a Netherlands-based producer of polypropylene and polyethylene. Lyondell is a Houston-based chemical company.

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