Flextronics sets talk; CW firms OID, breaks for trading; Laureate creeps higher; LCDX stronger

By Sara Rosenberg

New York, Sept. 21 - Flextronics International Ltd. came out with price talk on its term loan debt as the deal was launched with a bank meeting on Friday and CW Media Inc. finalized the original issue discount on its term loan, which was then allocated and freed up for trading.

In other news, Laureate Education Inc.'s term loan debt inched its way higher during Friday's trading session so that it is now trading around a full point higher than the original issue discount, and LCDX was better in sympathy with equities.

Flextronics held a bank meeting on Friday at 9:30 a.m. ET at the InterContinental in New York to kick off syndication on its proposed $2.5 billion in senior unsecured term loan debt (Ba1/BB+), and in connection with the launch, price talk was announced, according to a market source.

Both the $500 million five-year term loan B-1 and the $2 billion seven-year term loan B-2 were presented to lenders with price talk of Libor plus 225 basis points, the source said.

By comparison, back in July, the company said in a filing with the Securities and Exchange Commission that the loan was expected to carry pricing of Libor plus 200 bps.

The term loan B-2 carries 101 soft call protection for one year. The term loan B-1 does not carry any call protection, the source continued.

Citigroup is the lead bank on the deal.

As for the bank meeting itself, "there was a nice turnout. People looked like they had done some work. Had some good questions," the source remarked.

The deal had already received some early orders by Friday afternoon, the source added.

Proceeds from the term loan will be used to help fund the acquisition of Solectron Corp. for $3.6 billion.

Under the acquisition agreement, each share of Solectron common stock will be converted into the right to receive, at the election of each holder, 0.345 of a Flextronics share or a cash payment of $3.89, subject to the limitation that not more than 70% and no less than 50% of Solectron shares will be converted into shares of Flextronics. The total cash payment can range from around $1.06 billion to around $1.77 billion.

In addition to funding the cash payment, proceeds from the term loan will be used to refinance Solectron's debt, if required.

Flextronics is a Singapore-based electronics manufacturing services provider. Solectron is a Milpitas, Calif.-based provider of complete product lifecycle services.

Levi price talk surfaces

Price talk also emerged on Levi Strauss & Co.'s $750 million revolving credit facility.

According to a syndicate document, of the total revolver amount, $500 million is talked at Libor plus 150 bps, with a 25 bps commitment fee, and $250 million that is secured by the Levi's trademark in the United States is talked at Libor plus 250 bps.

Bank of America and Credit Suisse are the lead arrangers on the deal.

With this new deal, the company is basically upsizing its existing $550 million revolver by $200 million.

The revolver is being done in conjunction with, and is a condition of, the company's cash tender offer for any and all of its outstanding $525 million 12¼% senior notes due 2012. The tender offer will expire on Oct. 17.

Levi Strauss is a San Francisco-based apparel maker.

CW Media sets OID, breaks

CW Media firmed up the original issue discount on its C$475 million term loan at 97½ on Friday, and then the banks managed to allocate and break the loan for trading by the afternoon, according to a market source.

According to one trader, the paper saw a 99½ bid at 2:23 p.m. ET, "but maybe not trading, maybe a broker support bid. Still have not seen a second [bid] on the name."

A second trader, however, did see the term loan quoted at 99 3/8 bid, 99 7/8 offered.

Pricing on the term loan is set at Libor plus 325 bps. During syndication, the paper flexed up from original guidance given in July of Libor plus 250 bps to 275 bps.

The company's C$525 million credit facility (Ba1/B+) also includes a C$50 million revolver that is priced at Libor plus 325 bps as well. Pricing on this tranche also flexed up from original guidance given in July of Libor plus 250 bps to 275 bps.

Goldman Sachs and Credit Suisse are the lead banks on the deal, which was informally relaunched via the banks' sales force in September, with Goldman Sachs the left lead.

The facility has a net total leverage maintenance test.

Proceeds from the credit facility, which already funded, were used to help finance the acquisition of Alliance Atlantis Communications Inc. by CanWest Global Communications Corp. and GS Capital.

CW Media is a provider of specialty channels in Canada.

Laureate trades up

Also in the secondary, Laureate Education's strip of funded and delayed-draw term loan B debt headed to stronger levels during its second day of trading, according to a trader.

The term loan B was quoted at 97 bid, 97½ offered, up from Thursday's closing levels of 96 7/8 bid, 97¼ offered, the trader said.

Late in the day Thursday, the $775 million in senior secured seven-year covenant-light term loan debt (B1/B) - of which $675 million is funded and $100 million is delayed-draw - saw its original issue discount finalized at 961/4.

Once the discount firmed up, the banks were able to give out allocations and free the paper up for trading. Immediately on the break on Thursday, the debt was quoted at 96¼ bid but it quickly traded up before the close.

Pricing on the funded and delayed-draw term loan Bs is set at Libor plus 325 bps.

The delayed-draw term loan carries a commitment fee of 100 bps in year one and 125 bps in year two.

Laureate is a Baltimore-based provider of higher education.

LCDX up with stocks

LCDX was better on Friday, as was the cash market in general, in reaction to equities rising, according to a trader.

The index went out around 97.35 bid, 97.50 offered, up from 97.05 bid, 97.15 offered, the trader said.

During the session, the index reached a trading high of around 97.60 before settling in at the closing levels.

Meanwhile, the cash market was flat to up a quarter of a point, depending on the name, the trader added.

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