Landry's postpones launch; Turner timing emerges; SRAM floats talk; Burlington slides with numbers

By Sara Rosenberg

New York, Sept. 2 - On the new deal front on Tuesday, Landry's Restaurants Inc. decided to push out the retail launch of its credit facility from this week to an undetermined date and Turner Bros. came out with timing on the launch of its bank deal.

Also in new deal happenings, SRAM revealed price talk on its credit facility and talk is that depending on how the current early round syndication goes, a general syndication bank meeting may not be needed.

Meanwhile, in the secondary market, Burlington Coat Factory Warehouse Corp.'s term loan headed lower on the back of the release of fiscal year 2008 results, LyondellBasell Industries' bank debt inched higher and LCDX 10 was better on the day.

Landry's Restaurants came to the conclusion that it will be delaying the previously scheduled Thursday bank meeting for its $300 million senior secured credit facility, and a new date for the launch has yet to be picked, a market source told Prospect News.

The source went on to say that the bank meeting could take place next week or a little later than that.

The facility consists of a $50 million five-year revolver and a $250 million five-year term loan A.

According to filings with the Securities and Exchange Commission, pricing on the revolver and the term loan is expected to be Libor plus 400 basis points, with a 3.25% Libor floor, and the revolver has a 50 bps commitment fee.

Official price talk on the deal, however, has not yet been announced.

Amortization on the term loan is 2.5% in year one, 7.5% in year two and 10% in years three, four and five, with the rest due at maturity.

Wells Fargo Foothill and Jefferies are the co-lead arrangers, co-bookrunners and co-syndication agents on the deal, with Well Fargo the administrative agent.

Proceeds from the credit facility will be used to help fund the buyout of the company by Fertitta Holdings Inc for $21 per share in cash. The total value of the deal is about $1.3 billion, including about $885 million of debt.

Fertitta is a newly formed entity wholly owned by the company's chairman, president, chief executive officer and original founder, Tilman J. Fertitta, who beneficially owns about 39% of the company's outstanding common shares.

Landry's is a Houston-based restaurant, hospitality and entertainment company.

Turner launch surfaces

Turner Bros. firmed up timing on the launch of its proposed $86 million six-year credit facility, with the scheduling of a bank meeting for Wednesday, according to a market source.

The deal was originally scheduled to launch on Aug. 6 and then tentatively reset for Aug. 13; however, in the end it was moved to September business as a result of the lead bank having too many deals to launch during that August timeframe and the Labor Day holiday weekend.

The facility consists of a $15 million revolver and a $71 million term loan, and, as was announced back in August, both tranches are being talked at Libor plus 475 bps with an original issue discount of 98, the source said.

The facility does not have a Libor floor.

GE Capital is the lead bank on the deal that will be used to fund Huntsman Gay Capital Partners' acquisition of the company from Saw Mill Capital.

Other financing will come from $52 million of mezzanine debt that is being placed by the company/sponsor.

Turner Bros. is a provider of industrial plant maintenance services using its fleet of cranes and specialized transportation equipment.

SRAM price talk

SRAM came out with price talk on its $265 million credit facility (Ba3/B+), which is currently involved in an early bird round of syndication and is unsure as to whether a general syndication round will be necessary, according to a market source.

Both the $25 million revolver and the $240 million term loan are being talked at Libor plus 475 bps with a 3% Libor floor and an original issue discount of 98, the source said.

The source explained that the early syndication round has, so far, garnered a strong response from investors, leaving the issue of a general syndication bank meeting still up in the air.

The early round is expected to wrap up this week, at which time the question of a general syndication round should be answered, the source remarked.

If it decided that a general syndication launch is the best way to go, that bank meeting would probably take place sometime next week, the source added.

GE Capital is the lead bank on the deal that will be used to help fund Lehman Brothers Merchant Banking's acquisition of a minority interest in the company.

Other financing will come from $110 million of mezzanine debt.

The transaction is expected to close in late September.

SRAM is a Chicago-based bike components company.

Burlington trades lower

Switching to secondary news, Burlington's term loan gave up some ground in trading on Tuesday in reaction to relatively weak financial numbers that were announced in a 10-K late Friday, according to traders.

The term loan was quoted at 75½ bid, 77½ offered, down from 77 bid, 78½ offered, traders said.

For fiscal year 2008, the company reported a net loss of $49 million, compared with a net loss of $47.2 million in fiscal year 2007.

Total revenues for the fiscal year were $3.42 billion, down from $3.44 billion last year.

Net sales for the 52 week period ended May 31 were $3.39 billion, down $10 million, or 0.3%, from $3.4 billion in the 52 week period ended June 2, 2007.

Comparative stores sales decreased 5.2% for the 2008 fiscal year due primarily to unseasonably warm weather in September and October, weakened consumer demand similar to what other retailers experienced and temporarily low or out of stock issues in certain limited divisions.

Gross margin as a percentage of sales increased to 38.3% from 37.6% during the period ended May 31, compared with the period ended June 2, 2007, primarily as a result of improved initial markups which are the result of lower costs associated with better negotiating and buying efforts.

EBITDA for the 52 week period was $250.6 million, a $9.6 million decrease from $260.2 million in the fiscal year ended June 2, 2007.

The company generated $6.2 million of positive cash flow for the year ended May 31, compared with negative cash flow of $24.5 million for the year ended June 2, 2007.

Net cash provided by continuing operations of $98 million for fiscal 2008 was $2 million, up from $96 million last year.

As of May 31, Burlington had total debt outstanding of $1.5 billion including $181.6 million outstanding under its ABL facility and $872.8 million outstanding under its term loan.

During the fiscal year, the company paid down $11.4 million of its term loan debt.

Burlington is a Burlington, N.J.-based retailer of branded apparel.

LyondellBasell rises

LyondellBasell's bank debt traded stronger during market hours on no credit specific news, according to a trader.

"I think people like the yield and I think people aren't really worried that they're going to default anymore. People like the risk-reward on it," the trader said in explanation of the day's performance.

The company's term loan A was quoted at 83½ bid, 84¼ offered, compared to levels of 82¾ bid, 83¾ offered at the open on Tuesday, the trader remarked.

Furthermore, the term loan B-2 was quoted at 81 5/8 bid, 82 3/8 offered and the term loan B-3 was quoted at 81½ bid, 82½ offered, with both of these tranches up roughly a quarter to a half a point on the day, the trader added.

LyondellBasell is a Netherlands-based polymers, petrochemicals and fuels company.

LCDX ends up

LCDX 10 was stronger on a day-over-day basis, though it did come in off its highs of the day when equities retreated, according to a trader.

The index was quoted around 97.10 bid, 97.25 offered, up from 96.95 bid, 97.095 offered on Friday, the trader said.

At one point during the session though, the index was quoted around 97.25 bid, 97.50 offered, the trader added.

As for stocks, Nasdaq closed down 18.28 points, or 0.77%, Dow Jones Industrial Average closed down 26.63 points, or 0.23%, S&P 500 closed down 5.25 points, or 0.41%, and NYSE closed down 85.11 points, or 1.01%.

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