OSI Restaurant, Edgen Murray set talk; US Cable adds step; Iron Mountain, Iasis PIK loan break

By Sara Rosenberg

New York, April 13 - OSI Restaurant Partners Inc. and Edgen Murray, LP came out with price talk on their credit facilities as both deals were launched with bank meetings on Friday.

In other primary news, US Cable of Coastal-Texas LP firmed up pricing on its credit facility at the tight end of talk and added a step down to the term loan B tranche.

Moving to the secondary, Iron Mountain Inc.'s credit facility freed up for trading with the term loan quoted atop par, and Iasis Healthcare Corp.'s holdco PIK loan broke as well, with levels seen in the 99's.

OSI Restaurant held a bank meeting on Friday at 10:00 a.m. ET to launch its $1.33 billion senior secured credit facility into syndication, and at the launch, price talk on the transaction was announced to potential investors, according to a fund manager.

The $1.08 billion seven-year term loan, the $150 million six-year revolver and the $100 million six-year pre-funded revolver were all presented to lenders with price talk of Libor plus 250 basis points, the fund manager said.

Deutsche Bank and Bank of America are the lead banks on the deal, with Deutsche the left lead.

Proceeds will be used to help fund the leveraged buyout of the company by an investor group comprised of Bain Capital Partners, LLC, Catterton Partners and company founders Chris T. Sullivan, Robert D. Basham and J. Timothy Gannon.

The total transaction value, including assumed debt, is $3.2 billion, with OSI stockholders receiving $40.00 per share in cash.

Other leveraged buyout financing will come from $700 million in high-yield notes, real estate financings, $827.3 million in cash equity and $217.5 million in rollover equity.

"I think the deal will be very well received," a fund manager remarked. "It has sufficient cushion in the form of a high-yield note issue and [a] big slug of equity.

"That said, recent trends have been weaker and with the restaurants higher price points, they will likely be susceptible to declining consumer confidence and other economic indicators," the fund manager added.

OSI is a Tampa, Fla., casual dining restaurant company with a portfolio of brands, including Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, Fleming's Prime Steakhouse & Wine Bar, Roy's, Lee Roy Selmon's, Blue Coral Seafood & Spirits and Cheeseburger in Paradise.

Edgen Murray price talk

Also releasing spread guidance on Friday was Edgen Murray as it kicked off syndication on its $500 million of term loan debt, according to a market source.

The $425 million seven-year first-lien term loan (B3/B) was launched with talk of Libor plus 275 bps, while the $75 million eight-year second-lien term loan (B3/CCC+) was launched with talk of Libor plus 600 bps to 625 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.

A portion of the first-lien term loan will be available at a U.K. borrower.

Lehman Brothers and Jefferies Finance LLC are the lead banks on the term loans.

Edgen Murray will also be getting a $150 million ABL revolver that is being led by GMAC and being done via a separate syndication.

Proceeds will be used for a recapitalization of the company that will include the refinancing of existing credit facility debt, $136 million of 9 7/8% senior secured notes due 2011 and $130 million of senior secured floating-rate notes due 2010.

In addition, Jefferies Capital Partners and Edgen Murray management will purchase the company's subsidiaries from its existing partners, using cash from a portion of the refinancing proceeds and equity financing proceeds.

The remainder of the net cash proceeds are expected to be used for general corporate purposes.

Commitments from lenders for the term loans are due on April 25.

Edgen Murray is a Baton Rouge, Pa.-based distributor of high performance carbon and alloy steel products for use primarily in specialized applications in the energy infrastructure market.

US Cable sets spreads, adds step

In other primary happenings, US Cable of Coastal-Texas finalized pricing on both tranches under its $130 million credit facility at the low end of original guidance and added a pricing step down to the nearly three times oversubscribed term loan B, according to a market source.

Both the $20 million six-year revolver and the $110 million seven-year term loan B finished up with pricing of Libor plus 275 bps, the source said. Price talk on both of these tranches at launch was Libor plus 275 bps to 300 bps.

In addition, the term loan B now has the ability to see pricing drop to Libor plus 250 bps when leverage is less than 4.25 times, which isn't anticipated until the end of 2008, the source continued.

Final allocations on the deal are expected to go out on Monday.

SunTrust is the lead bank on the deal, which will be used to refinance existing debt.

US Cable of Coastal-Texas is a provider of cable television services and high-speed Internet services that is 52% owned by US Cable and 48% owned by a subsidiary of Comcast Corp.

Iron Mountain frees to trade

Switching to trading news, Iron Mountain's credit facility hit the secondary, with the $300 million term loan quoted at par 3/8 bid, par 5/8 offered, according to a trader.

The term loan is priced at Libor plus 150 bps.

Iron Mountain's $900 million credit facility (Ba2/BB) also includes a $600 million revolver priced at Libor plus 150 bps.

JPMorgan is the lead bank on the deal, which will be used to refinance existing debt.

Iron Mountain is a Boston-based provider of information protection and storage services.

Iasis PIK loan breaks

Also freeing up for trading on Friday was Iasis' $300 million holdco senior PIK loan due June 15, 2014 (Caa1/CCC+), with levels quoted at 99 bid, 99½ offered, according to a trader.

The PIK loan is priced at Libor plus 525 bps and was issued to investors with an original issue discount of 981/2. During syndication, pricing firmed up at the high end of original guidance of Libor plus 500 bps to 525 bps.

The loan is non-callable for one year, then at 102 in year two and 101 in year three.

Bank of America and Citigroup are the joint bookrunners on the deal, with Bank of America the left lead.

Proceeds will be used to fund a dividend to the equity holders of the issuer's parent company.

Iasis is a Franklin, Tenn.-based owner and operator of medium-sized acute care hospitals

Waste Services closes

Waste Services Inc. closed on its $50 million term loan add-on, which was used to repay outstanding borrowings under the company's revolving credit facility, to complete the acquisition of USA Recycling in Florida and for general corporate purposes, according to a company news release.

The add-on is priced at Libor plus 250 bps with 101 soft call protection for one year.

In addition, the company repriced its existing term loan debt at Libor plus 250 bps from Libor plus 275 bps, with the 101 soft call.

Lehman acted as the lead bank on the deal.

Waste Services is a Burlington, Ont., integrated solid waste services company.

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