Invitrogen sets Sept. 5 bank meeting for $2.65 billion loan; LCDX 5 bps better as traders pass quiet session

By Paul A. Harris

St. Louis, Aug. 26 - The LCDX 10 index closed the Tuesday session at 96.85 bid, 96.95 offered, up 5 basis points on the session, according to sources, who added that the session was a quiet one.

Late in the day a trader told Prospect News: "Something must have traded somewhere, but I didn't see it."

However the trader added that some of the First Data Corp. B-2 term loan traded late Monday at 92.00, which was a little stronger than what the market had been seeing. The general market bid for the loan was 91.75, the trader said.

Meanwhile news surfaced on the September pipeline, as market sources mentioned names including Invitrogen Corp., Ashland Inc., Brocade Communications Systems Inc. and 1-800 Contacts Inc.

Also an informed source said that the Hudson Products term loan allocated on Tuesday and will begin trading on Wednesday.

Invitrogen slates bank meeting

Underwriters will hold a Sept. 5 bank meeting for Invitrogen's planned $2.65 billion credit facility, according to a market source.

Bank of America, UBS and Morgan Stanley are the joint lead arrangers and joint bookrunners on the facility, with Bank of America the left lead and administrative agent, and UBS and Morgan Stanley the co-syndication agents.

The facility consists of a $250 million revolver, a $1.5 billion term loan A and a $900 million term loan B, the source said.

The source said that the deal is heard to be doing well, with $1.75 billion of commitments for the pro rata portions.

Price talk on the revolver and the term loan A has started circulating in the Libor plus 250 bps area, the source added.

Proceeds will be used to help fund the acquisition of Applied Biosystems, help repay all of Invitrogen's debt, other than its convertible notes and certain other exceptions, and provide for ongoing working capital and general corporate purposes of the combined company.

Under the agreement, Invitrogen is buying Applied Biosystems from Applera Corp. in a cash and stock transaction valued at $6.7 billion.

The transaction is targeted to close in the fall, subject to approval by Invitrogen and Applera-Applied Biosystems shareholders and the satisfaction of customary closing conditions, completion of the previously filed and announced separation of Applera's Celera group, and regulatory approvals. It is not subject to financing.

On July 1, Applera announced that it completed the separation of its Celera business and that the remaining Applera business, which is what Invitrogen is purchasing, changed its name to Applied Biosystems.

Following the close of the transaction, the combined company will be named Applied Biosystems, Inc. and will have its corporate headquarters in Carlsbad, Calif.

Invitrogen is a provider of life science technologies for disease research, drug discovery and commercial bioproduction. Applied Biosystems is a developer and marketer of instrument-based systems, consumables, software and services.

September pipeline

In terms of the post-Labor Day pipeline, sources also mentioned a Sept. 4 bank meeting for Brocade's $1.125 billion senior secured credit facility via Bank of America and Morgan Stanley.

In addition 1-800 Contacts has a bank meeting scheduled for Sept. 4. JP Morgan is leading that deal.

Meanwhile a trader mentioned that Ashland's proposed $1.75 billion senior secured credit facility is expected to come during the first two weeks of September, an acquisition financing via Bank of America and Scotia Capital.

A portfolio manager who spoke to Prospect News on Tuesday morning does not expect a substantial post-Labor Day pipeline - at least not right away.

"The index is trading down," the source said, and added that the leveraged loan market continues to harbor fundamental concerns.

Front and center among those concerns are the Fannie Mae and Freddie Mac situations, as well as the situation with Lehman Brothers, the source said, referring to reports that the mortgage lenders will have to be bailed out by the government, and that Lehman Brothers, also suffering in part from its exposure to mortgages, is now a takeover target.

Shortly after a trader also said that a quick early September build-up to the new deal calendar is unlikely.

Hudson allocates

Meanwhile the Hudson Products $220 million seven-year term loan B allocated on Tuesday, according to an informed source.

Last week the company increased the original issue discount on its term loan B to 97 from 98 that was announced at launch, the source said.

Pricing on the term loan B is Libor plus 500 basis points with a 3% Libor floor for life.

Earlier on in syndication, pricing on the term loan B had been flexed up from original talk of Libor plus 425 bps.

Hudson Products' $250 million credit facility (Ba3/BB-) also includes a $30 million five-year revolver that is priced at Libor plus 500 bps with a 3% Libor floor for life as well.

Pricing on the revolver had also been increased from Libor plus 425 bps earlier in the syndication process.

BNP Paribas is the lead bank on the facility that will be used to help fund the buyout of the company by Riverstone Holdings LLC from the Sterling Group LP.

United Online closes

Also completing its transaction, United Online Inc. wrapped its acquisition of FTD Group Inc., a transaction funded in part by a new $425 million credit facility.

The loan, via Wells Fargo, is made up of a $50 million five-year revolver at Libor plus 350 bps with a 3% Libor floor, a $75 million five-year term loan A at Libor plus 350 bps, also with a 3% Libor floor and a $300 million six-year term loan B at Libor plus 450 bps, with a step down to Libor plus 425 bps at 2½ times total leverage and a 3% Libor floor. The term B was sold with an OID of 98.

In addition United Online obtained a $60 million four-year senior secured term loan via Silicon Valley Bank priced at Libor plus 350 bps with a 3% Libor floor.

United Online Inc. is a Woodland Hills, Calif., provider of consumer products and services over the internet.

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