Swank OID emerges; Bosque Power sets talk; LyondellBasell outlines upfront fees

By Sara Rosenberg

New York, Nov. 29 - Swank Audio Visuals, LLC came out with the original issue discount on its term loan as the deal was launched with a bank meeting during Thursday's market hours, and Bosque Power released price talk on its new deal as it too kicked off syndication during the session.

In more primary happenings, LyondellBasell Industries detailed the upfront fees on its ABL debt as this was yet another deal to be launched Thursday.

Swank Audio Visuals held a bank meeting to present its credit facility, and in connection with the launch, the original issue discount on the term loan was announced, according to a market source.

The $59 million term loan is being offered to investors at a discount of 99, the source said.

As was previously reported, price talk on the term loan is Libor plus 350 basis points.

Swank Audio Visuals' $89 million credit facility also includes a $15 million revolver and a $15 million capital expenditures line, with both of these tranches talked at Libor plus 350 bps as well.

GE Capital is the sole lead bank on the deal, which will be used to help back Code Hennessy & Simmons LLC's acquisition of a majority stake in the company.

Other financing for the buyout is coming from a $20 million first-lien, last-out loan that is priced at Libor plus 600 bps and a $48.5 million second-lien term loan that is priced at Libor plus 700 bps. Both of these tranches have already been placed.

Senior leverage is 2.3 times and total leverage is 5.2 times.

Swank Audi0 Visuals is a St. Louis-based provider of audio visual services for corporate meetings and events at hotels.

Bosque Power price talk

Bosque Power also held a bank meeting on Thursday, at which time price talk and original issue discounts were revealed on its $412.5 million credit facility, according to a market source.

The $25 million revolver and the $387.5 million term loan were both presented to lenders with talk of Libor plus 450 bps, the source said.

The term loan is being offered at an original issue discount of 991/2, the source added.

Credit Suisse is the lead bank on the deal, which will be used to help fund the acquisition of the Bosque power generation facility by Arcapita Inc. and Fulcrum Power Services LP from LS Power Group.

Located in Laguna Park, Texas, the Bosque facility commenced operations as a natural gas-fired power plant in 2000 and is currently undergoing conversion to a combined cycle facility with a capacity of over 800 megawatts.

LyondellBasell sets upfront fees

LyondellBasell came out with the upfront fees on its ABL revolvers as it held a well-attended bank meeting (that even included some term loan investors) during market hours to launch the ABL debt into syndication, according to an informed source.

For commitments of up to $50 million, investors will get 30 bps upfront; for commitments of $50 million to $100 million, investors will get 45 bps upfront; and for commitments of $100 million plus, investors will get 60 bps upfront, the source said.

The ABL debt is comprised of a $1.15 billion ABL receivables purchase program facility talked at Libor plus 150 bps and a $1 billion ABL inventory-based facility talked at Libor plus 175 bps.

"You pick whichever you want to commit to. Offer applies to both," the source added regarding the upfront fee.

The ABL tranches are part of a $14.6 billion senior secured credit facility that also includes a $1 billion cash flow revolver (Ba2/BB) talked at Libor plus 300 bps, with a 75 bps undrawn fee, a $2 billion U.S. and euro term loan A (Ba2/BB) talked at Libor plus 300 bps and a $9.45 billion U.S. and euro term loan B (Ba2/BB) talked at Libor plus 325 bps.

Senior managing agent rounds for the deal already took place at the end of October in New York and London.

There is still no announcement on when the cash flow revolver and term loan debt will be launched to retail investors, although some are guessing that it may not happen till early next year. Previously, it was thought that the retail launch could occur this week. It was also speculated that the term loan B might be offered to investors at an original issue discount of 99.

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

Covenants under the cash flow revolver, term loan A and term loan B include a first-lien senior secured leverage ratio of 3.75 times and a fixed-charge coverage ratio of 1.1 times.

Proceeds will be used to help fund Basell's acquisition of Lyondell Chemical Co. for $48 per common share in an all-cash transaction with a total enterprise value of about $19 billion, including the assumption of debt.

The combined company will be named LyondellBasell Industries.

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

FHC allocates

FHC Health Systems Inc. allocated its $290 million credit facility, and although the deal was free to trade, it was not being quoted in the secondary market, according to a trader.

The facility consists of a $175 million six-year first-lien term (B1/B+) priced at Libor plus 500 bps, an $85 million 61/2-year second-lien term loan (B3/CCC+) priced at Libor plus 850 bps, a $20 million five-year asset-based revolver that is being held by Merrill Lynch and a $10 million five-year cash flow revolver (B+).

The first- and second-lien term loans were sold to investors at a discount of 98.

During syndication, pricing on the first-lien term loan was increased from revised guidance of Libor plus 400 bps to 450 bps and original talk at launch of Libor plus 350 bps, pricing on the second-lien term loan was increased from original talk of Libor plus 750 bps, and the discount on the first- and second-lien term loans was raised from 99.

Covenants include total leverage, interest coverage and capital expenditures.

Goldman Sachs is the lead bank on the deal, which will be used to help back the buyout of the company by Crestview Partners.

Leverage through the first-lien debt is 2.3 times, and leverage through the second-lien debt is 3.4 times.

FHC Health Systems is a Norfolk, Va., provider of behavioral health care services.

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