McKechnie Aerospace sets talk; Adesa, Goodyear, United Surgical, US Cable break

By Sara Rosenberg

New York, April 18 - McKechnie Aerospace came out with price talk on its credit facility as the deal was launched to investors with a bank meeting during Wednesday's market hours.

Meanwhile, in the secondary market, Adesa Inc., the Goodyear Tire & Rubber Co., United Surgical Partners International Inc. and US Cable of Coastal-Texas LP all saw their credit facilities free up for trading.

McKechnie Aerospace held a bank meeting on Wednesday morning to kick off syndication on its proposed $540 million credit facility, and with the launch, price talk on the transaction surfaced, according to a market source.

Both the $40 million revolver (Ba3/B+) and the $300 million first-lien term loan B (Ba3/B+) were presented to lenders with talk of Libor plus 250 basis points, while the $200 million second-lien term loan (Caa1/CCC+) was presented with talk of Libor plus 550 bps, the source said.

The first-lien term loan B may have euro and sterling sub tranches.

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

Bear Stearns and Morgan Stanley are the joint lead arrangers on the deal, with Bear Stearns the sole bookrunner. General Electric Capital Corp. is the documentation agent.

Proceeds will be used to help fund JLL Partners' acquisition of the company from Melrose plc for $855.6 million, including $5.6 million of assumed debt.

McKechnie is an Alcester, England-based producer of door latches, rods and struts for aircraft interiors and a distributor of aircraft batteries.

Coach America ups second-lien spread

Coach America increased pricing on its $55 million second-lien term loan (Caa1/CCC+) to Libor plus 650 bps from original talk at launch of Libor plus 600 bps, according to a market source.

Call protection on the second-lien loan remained unchanged at 102 in year one and 101 in year two.

Coach America's $380 million credit facility also includes a $195 million funded first-lien term loan (B1/B), a $50 million delayed-draw for one year first-lien term loan (B1/B), a $50 million synthetic letter-of-credit facility (B1/B) and a $30 million revolver (B1/B), with all of these tranches priced at Libor plus 275 bps.

The delayed-draw loan carries a 125 bps undrawn fee.

No changes have been made to the pricing of the first-lien debt throughout the syndication process; however, last week a leverage covenant was added to the two term loans and the synthetic letter-of-credit facility.

Bear Stearns and RBS Securities are the joint lead arrangers on the deal, with Bear Stearns acting as bookrunner.

Proceeds will be used to fund Fenway Partners' acquisition of the company from Kohlberg & Co.

Coach America is a tour and charter bus operator and a motorcoach services provider.

Adesa frees to trade

Switching to the secondary market, Adesa's credit facility broke for trading, with the $1.565 billion covenant-light term loan B quoted at par ½ bid, par ¾ offered, according to a trader.

The term loan B is priced at Libor plus 225 bps with a step down to Libor plus 200 bps if total leverage is below 4.75 times or corporate credit ratings of B1/B+ are obtained.

During syndication, the term loan B was upsized by $75 million from $1.49 billion after the company downsized its bond offering by the equivalent amount, pricing firmed up at the low end of original guidance of Libor plus 225 bps to 250 bps and the step down was added.

Adesa's $1.865 billion senior secured credit facility (Ba3/B) also includes a $300 million revolver that is priced at Libor plus 200 bps - also the tight end of original talk of Libor plus 225 bps to 250 bps.

Bear Stearns, UBS, Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Bear Stearns the left lead.

Proceeds will be used to help fund the leveraged buyout of Adesa by Kelso & Co., GS Capital Partners, ValueAct Capital and Parthenon Capital for $27.85 per share in cash.

As part of the transaction, Insurance Auto Auctions, Inc., a Kelso and Parthenon Capital-owned provider of automotive salvage auction and claims processing services, will be combined with Adesa.

The total transaction value, including the contribution of Insurance Auto, the assumption or refinancing of about $700 million of debt and the payment of related fees and expenses, is $3.7 billion.

Adesa is a Carmel, Ind., provider of wholesale vehicle auctions and used vehicle dealer floorplan financing.

Goodyear trades atop par

Goodyear's credit facility also hit the secondary market on Wednesday, with the $1.2 billion second-lien term loan (Ba2/B+) due in 2014 quoted at par ¼ bid, par ½ offered, according to a trader.

The second-lien term loan is priced at Libor plus 175 bps.

Goodyear's $2.7 billion amended and restated credit facility also includes a $1.5 billion asset-based revolver (Ba1/BB) due in 2013 that is priced at Libor plus 125 bps.

The company is also getting an amended and restated €505 million revolving credit facility (Ba1) due in 2012 that is priced at Euribor plus 200 bps.

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

Proceeds from the bank deals will be used to refinance the company's $1.5 billion first-lien credit facility due April 30, 2010, $1.2 billion second-lien term loan due April 30, 2010 and €505 million credit facility for Goodyear Dunlop Tires Europe affiliate due April 30, 2010.

Goodyear is an Akron, Ohio, tire company.

United Surgical breaks

United Surgical Partners' credit facility broke for trading on Wednesday as well, with its $430 million seven-year funded term loan B quoted at par ½ bid, 101 offered, according to a trader.

The funded term loan B is priced at Libor plus 200 bps.

During syndication, the funded term loan B was upsized from $390 million after the company downsized its bond offering to $440 million from $480 million and pricing was reduced from original talk at launch of Libor plus 225 bps.

United Surgical Partners' $630 million senior secured credit facility (Ba3/B) also includes a $100 million 18-month delayed-draw seven-year final maturity term loan priced at Libor plus 200 bps and a $100 million six-year revolver priced at Libor plus 225 bps.

The delayed-draw term loan carries a 125 bps unused fee, and the revolver has a 50 bps unused fee.

During syndication, pricing on the delayed-draw term loan was reverse flexed from original talk at launch of Libor plus 225 bps.

Citigroup, Lehman, SunTrust, UBS and Bear Stearns are the lead banks on the deal.

Proceeds will be used to help fund Welsh, Carson, Anderson & Stowe's buyout of the company for $1.8 billion, which includes the assumption of certain debt. Holders of United Surgical common stock will receive $31.05 per share in cash for their shares.

United Surgical is an Addison, Texas, owner and operator of short-stay surgical facilities.

US Cable wraps around 101

And yet another deal to free up for trading during market hours was US Cable of Coastal-Texas, with its $110 million seven-year term loan B quoted at par 3/8 bid, par 5/8 offered on the open and then moving up to par 7/8 bid, 101¼ offered, where it closed out the session, according to market sources.

The term loan B is priced at Libor plus 275 bps with a step down to Libor plus 250 bps when leverage is less than 4.25 times, which isn't anticipated until the end of 2008.

During syndication, the term loan B pricing firmed up at the low end of original talk of 275 bps to 300 bps and the step down was added as the tranche was nearly three times oversubscribed.

US Cable of Coastal-Texas' $130 million credit facility also includes a $20 million six-year revolver priced at Libor plus 275 bps - also the low end of original talk of Libor plus 275 bps to 300 bps.

SunTrust is the lead bank on the deal, which is being 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.

Itron closes

Itron Inc. closed on its new $1.2 billion senior secured credit facility (Ba3/B+) consisting of a $605 million first-lien term loan priced at Libor plus 225 bps, a €335 million first-lien term loan priced at Euro Libor plus 225 bps, a £50 million first-lien term loan priced at U.K. Libor plus 225 bps and a $115 million multicurrency revolver.

UBS Securities LLC acted as the lead bank on the deal, which was used to help fund the acquisition of Actaris Metering Systems for €800 million, plus the retirement of about €445 million of debt, which totals about $1.7 billion.

Itron is a Liberty Lake, Wash., provider of hardware, software and services to integrate the creation, measurement, collection, management, application and forecasting of data for electric, gas and water utilities. Actaris is a Luxembourg-based gas and water metering company.

Callon closes

Callon Petroleum Co. closed on its new $200 million seven-year synthetic revolving credit facility, according to a company news release.

The revolver is priced at Libor plus 700 bps, is non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four and was sold to investors with an original issue discount of 99.

During syndication, pricing was flexed up from original talk at launch that was in the Libor plus 600 bps area, call protection was revised from the originally proposed premiums of 102 in year one and 101 in year two, the original issue discount was added and the maximum leverage and the minimum interest coverage covenants were both modified.

Merrill Lynch acted as the lead bank on the deal.

Proceeds were used to fund the acquisition of BP Exploration and Production Co.'s 80% working interest in the Entrada Field for total cash consideration of $190 million. The purchase price included $150 million payable at closing and an additional $40 million payable after the achievement of certain production milestones.

Callon is a Natchez, Miss., explorer, developer, acquirer and operator of oil and gas properties.

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