NewPage breaks; Tribune term B inches up; Dura Automotive raises spread, discount

By Sara Rosenberg

New York, Dec. 7 - NewPage Corp. allocated its credit facility on Friday, with the term loan freeing up for trading above its original issue discount level, and Tribune Co.'s term loan B was slightly better as people had time to digest the recent bridge loan commitment reduction news.

Meanwhile, over in the primary, Dura Automotive Systems, Inc. made some changes to its credit facility, including raising pricing and offering a bigger original issue discount, and is planning on allocating in the near term.

NewPage's credit facility hit the secondary market late in the day on Friday, with the $1.6 billion term loan that is due in 2014 quoted at 98 bid, 98½ offered, according to a trader.

The term loan is priced at Libor plus 375 basis points and was sold at an original issue discount of 97.

During the quick retail syndication process, the discount on the term loan firmed up at the tight end of original guidance that was in the 96 to 97 area.

NewPage held a retail bank meeting for the deal on Tuesday and closed the books on Thursday, with a favorable result as the transaction was oversubscribed.

The term loan had been rumored to be attracting market attention prior to the launch as a result of the bridge being syndicated. In fact, back in October, it was heard that the loan was subscribed at pricing of Libor plus 375 bps and a discount of 99 - although that was not the official talk on the deal.

NewPage's $2.1 billion credit facility also includes a $500 million ABL revolver that is due in 2012 and is priced at Libor plus 200 bps.

Goldman Sachs is the lead bank on the deal.

Proceeds from the credit facility, along with a $456 million add-on to the company's second-lien senior secured notes due 2012, will be used to refinance existing bank debt and to help fund the acquisition of Stora Enso North America, a paper manufacturing business, from Stora Enso Oyj.

NewPage is buying Stora Enso North America for $1.5 billion in cash, a $200 million super holdco PIK note that NewPage will issue to Stora Enso and a 19.9% equity interest in the combined company.

Pro forma for the 12 months ended Sept. 30, the ratio of total debt to consolidated adjusted EBITDA is 6.0 times and the ratio of consolidated adjusted EBITDA to cash interest expense is 1.7 times.

NewPage is a Miamisburg, Ohio, producer of coated papers.

Tribune gains a little ground

Tribune's term loan B was a touch stronger on Friday in extremely light activity as the market had time to come to terms with the company's recent decision to repay some of its bridge loan commitment, according to traders.

According to one trader, the term loan B ended the day at 82¾ bid, 84¼ offered, compared with Thursday's closing levels of 82½ bid, 84 offered. On Wednesday, the loan had been quoted at 83½ bid, 84½ offered. (Note: Thursday's and Wednesday's closing levels were incorrectly reported in the Prospect News Bank Loan Daily on Dec. 7.)

Meanwhile, a second trader had the loan quoted at 84 7/8 bid, 85 5/8 offered, up from 84 3/8 bid, 85 3/8 offered on Thursday.

On Thursday morning, the Chicago-based media company said that it plans to reduce its $2.1 billion bridge loan commitment to $1.6 billion through the use of $500 million of available cash.

The bridge facility backs a proposed bond offering that is part of the company's second-step financing for its going-private transaction.

In the first stage of the public-to-private transaction, which was completed a few months ago, Tribune completed a cash tender offer for 126 million shares at $34 per share and refinanced its existing credit facilities. In the second stage, Tribune is buying all the remaining outstanding shares of the company.

The transaction is expected to close before the end of 2007 following satisfaction of the remaining closing conditions, including the receipt of a solvency opinion and completion of the committed financing.

In order for the company to be able to complete the second stage of the public-to-private transaction, a leverage condition must be met.

Based on the news, people started to assume that the paydown might be necessary in order for the leverage condition to be met, and if that's the case, then the next financials that get released by the company will likely be negative. Meaning, leverage might be down with the bridge reduction, but it's not really down because numbers won't be good.

The other thing that caught investors off guard was that they were assuming the first paydown to happen would be on the term loan X that only has a tenor of 18 months from the time it closed, one trader remarked.

And, from a first-lien perspective, people were upset because they still have the bulk of the debt and now they don't have the cash to back it since it's being used for the bridge loan reductions, the trader added.

Dura tweaks deal, readies allocations

Moving to the primary, Dura Automotive Systems came out with some revisions to its credit facility on Friday morning, gave lenders until the close of business to throw in their commitments and is targeting to allocate during the week of Dec. 10, according to a market source.

Under the changes, pricing on the $225 million three-year first-lien term loan B was flexed up to Libor plus 625 bps from original talk at launch in the Libor plus 550 bps area, and the discount on the paper was increased to 93 from the original offer of 99, the source said.

In addition, pricing on the $75 million 31/2-year second-lien term loan was flexed up to Libor plus 925 bps from original talk in the Libor plus 850 bps area, and the discount on this tranche was also increased to 93 from 99, the source continued.

As has been the case since launch, the first-lien term loan carries call protection of 102 in year one and 101 in year two, and the second-lien term loan is non-callable for one year, then at 102 in year two and 101 in year three.

Dura's $425 million senior secured exit financing credit facility also includes a $125 million three-year ABL revolver that is priced at Libor plus 250 bps, which is in line with initial talk.

Goldman Sachs and Barclays Capital are the lead banks on the deal.

Proceeds from the exit facility, combined with a proposed rights offering, will be used to repay the company's debtor-in-possession facility and pre-bankruptcy second-lien term loan and to fund plan distributions.

The company expects that its reorganization plan will be confirmed on Dec. 11 and that it will be able to exit bankruptcy protection by the end of the year.

However, just to be safe, at the end of November, the company requested a two-month extension to its exclusive period to file a plan of reorganization, which would give it until Jan. 31.

The company said it asked for the extension in the event that the plan is rejected and more time is needed to pursue all available alternatives, including potentially reformulating, negotiating or soliciting an alternative plan or plans of reorganization.

Dura is a Rochester Hills, Mich.-based automotive parts maker.

DirectBuy flexes up

DirectBuy increased pricing on both tranches under its $325 million credit facility and widened the original issue discount on its term loan B, according to a market source.

The $275 million term loan B and the $50 million revolver wrapped syndication with pricing of Libor plus 450 bps, up from original talk at launch of Libor plus 400 bps, the source said.

And, the original issue discount on the term loan B ended up at 96 as opposed to at 99½ as was originally proposed, the source added.

JPMorgan is the lead bank on the deal, which will be used to help fund the buyout of the company by Trivest Partners LP.

DirectBuy is a Merrillville, Ind., members-only showroom and home design center that offers merchandise at manufacturer-direct prices.

Vertellus increases OID

Vertellus Specialties Inc. revised the original issue discount on its $240 million first-lien term loan to 98½ from the originally proposed level of 991/4, according to a market source.

In addition, pricing on the first-lien term loan firmed up at Libor plus 425 bps, the wide end of initial guidance that was in the Libor plus 400 bps to Libor plus 425 bps range, the source said.

National City is the lead bank on the deal.

Proceeds will be used to help fund the buyout of the company by Wind Point Partners from Arsenal Capital Partners.

Vertellus is an Indianapolis-based specialty chemicals company.

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