Sabre, Synagro set talk; Georgia-Pacific adds call; Movie Gallery; Hanley Wood break

By Sara Rosenberg

New York, March 7 - Sabre Inc. and Synagro Technologies Inc. came out with price talk on their credit facilities as the two transactions were launched with bank meetings on Wednesday.

In other primary news, Georgia-Pacific Corp. added soft call protection to its term loan B-1 and term loan B-2 as part of its repricing amendment proposal.

Meanwhile, in the secondary, Movie Gallery Inc. and Hanley Wood LLC both saw their new deals free for trading during market hours.

Sabre officially kicked off syndication on its $3.515 billion senior secured credit facility on Wednesday with the holding of a bank meeting, and at the launch, price talk on the deal was announced, according to a market source.

Both the $500 million revolving credit facility (Ba3/B+) and the $2.715 billion first-lien term loan (Ba3/B+) were presented to lenders with opening talk of Libor plus 225 basis points, and the $300 million second-lien term loan (B3/B-) was presented with opening talk of Libor plus 500 bps, the source said.

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

Proceeds will be used to help fund the leveraged buyout of Sabre Holdings Corp. by Silver Lake Partners and Texas Pacific Group, to refinance certain debt and for general corporate purposes.

When the credit facility was first announced by the company in filings with the Securities and Exchange Commission, it was expected to be sized at $2.9 billion consisting of a $500 million revolver and a $2.4 billion term loan. The company has also had a commitment for a $700 million second-lien bridge loan.

Then, late last week, the structure shifted to a $2.7 billion first-lien term loan, a $500 million revolver and a $300 million second-lien loan.

And, finally, early this week, the structure shifted once again to minimally increase the size of the first-lien term loan to $2.715 billion.

Deutsche Bank, Merrill Lynch, Goldman Sachs and Morgan Stanley are the lead banks on the deal, with Deutsche the left lead.

Under the LBO agreement, Silver Lake and Texas Pacific will acquire the company for $32.75 per share in cash. The transaction is valued at about $5 billion, including the assumption of about $550 million in net debt.

It is anticipated that the company's outstanding 2011 and 2016 notes will remain outstanding.

Sabre is a Southlake, Texas, retailer of travel products and provider of distribution and technology services for the travel industry.

Synagro price talk

Continuing on the price talk front, Synagro launched its $100 million revolver (Ba3) and $290 million first-lien term loan (Ba3) on Wednesday with talk of Libor plus 225 to 250 bps, according to a market source.

In addition, the company's $150 million second-lien term loan (Caa1) was launched with talk of Libor plus 550 bps, the source remarked.

Bank of America, Citigroup and Lehman are joint bookrunners on the $540 million senior secured credit facility, with Bank of America and Citigroup the joint lead arrangers.

Proceeds will be used to fund The Carlyle Group's buyout of the company in a transaction valued at $772 million, including the assumption of $310 million in debt. Synagro shareholders will get $5.76 per share in cash.

Equity financing for the deal is expected to be about $277 million.

Synagro is a Houston-based recycler of biosolids and other organic residuals.

Georgia-Pacific adds soft call

Georgia-Pacific Corp. added 101 soft call protection for one year to its term loan B-1 and term loan B-2 to help push along its repricing amendment, according to a market source.

Under the proposal, the company is looking to reprice both its term loan A and its term loan B-1 at Libor plus 175 bps from Libor plus 200 bps.

In addition, the pricing grids on the term loan A and the term loan B-1 are being revised to bring the grids down by 25 bps and change the conditions under which pricing will step down.

Under the modified grids, pricing on both the term loan A and the term loan B-1 would now drop to Libor plus 150 bps when total leverage is under 4.6 times.

Furthermore, a step down is being added to the company's existing term loan B-2 tranche, which already carries pricing of Libor plus 175 bps, under which pricing can drop to Libor plus 150 bps when total leverage is less than 4.6 times.

However, the new pricing grids on the term loan A, term loan B-1 and term loan B-2 do not take affect until the company delivers second-quarter 2007 financial statements.

Lastly, under the amendment proposal, the commitment fee on the company's revolver is being reduced to 37.5 bps from 50 bps.

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

Following the addition of the soft call protection, trading levels on the term loan B-1 and term loan B-2 rose by just about an eighth of a point to par 7/8 bid, 101 1/8 offered, a trader added.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals.

Movie Gallery frees to trade

In secondary happenings, Movie Gallery's credit facility broke for trading with the $525 million term loan B (B2/B-) quoted at par ¾ bid, 101¼ offered and the $250 million second-lien PIK toggle term loan (Caa1/CCC) quoted at 101½ bid, 102½ offered, according to traders.

The term loan B is priced at Libor plus 350 bps, and the second-lien term loan is priced at Libor plus 650 bps. During syndication, pricing on the term loan B was reverse flexed from original talk of Libor plus 400 bps and pricing on the second-lien was reverse flexed from original talk of Libor plus 700 bps.

Movie Gallery's $900 million five-year credit facility also includes a $25 million synthetic letter-of-credit facility (B2/B-) priced at Libor plus 350 bps and a $100 million revolver (B2/B-). Pricing on the synthetic letter-of-credit facility was also cut from original talk of Libor plus 400 bps during syndication.

Goldman Sachs is the lead arranger on the deal that will be used to refinance the company's existing bank debt and for general corporate purposes.

Movie Gallery is a Dothan, Ala., video rental company.

Hanley Wood breaks

Hanley Wood's credit facility also hit the secondary market on Wednesday, with the $401 million covenant-light term loan quoted at par bid, par ½ offered, according to a trader.

The term loan is priced at Libor plus 225 bps.

The company's $476 million credit facility also includes a $75 million revolver.

JPMorgan and Credit Suisse are the lead banks on the deal that will be used to refinance existing debt.

Hanley Wood is a Washington, D.C., business-to-business media company serving the residential and commercial construction industries.

Domtar closes

The formation of Domtar Corp. through the combination of Weyerhaeuser Co.'s fine paper business with Domtar Inc. was completed, according to a company news release.

To help fund the transaction, Domtar got a new $1.55 billion credit facility (Ba1/BB) consisting of a $750 million revolver priced at Libor plus 175 bps and an $800 million term loan B priced at Libor plus 137.5 bps.

During syndication, pricing on the term loan B was reduced from original talk at launch of Libor plus 175 bps.

JPMorgan and Morgan Stanley acted as the lead banks on the deal, with JPMorgan the left lead.

Under the transaction, Weyerhaeuser shareholders got a 55% ownership in the new company and former Domtar shareholders got 45% of the new company.

The newly combined company made a $1.35 billion cash payment to Weyerhaeuser as partial consideration for the assets being contributed.

Domtar is a Montreal-based paper company.

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