Clear Channel rises as company explores options; CommScope, EquiPower Resources set launches

By Sara Rosenberg

New York, Jan. 3 - Clear Channel Communications Inc.'s term loans headed higher on Monday in an overall strong secondary market as investors reacted to the company's recent announcement that it is looking at various options to enhance its capital structure.

Over in the primary, CommScope Inc. and EquiPower Resources Holdings surfaced with plans to bring new deals to market this week, and Houghton International Inc. has narrowed down timing on the launch of its proposed credit facility.

Clear Channel trades up

Clear Channel's term loans were noticeably stronger in trading on the back of the company's disclosure in a press release last week that it is exploring "a diverse array of alternatives in an effort to optimize its overall capital structure."

One trader had the term loan B quoted at 88½ bid, 89¼ offered, up from 86¾ bid, 87¾ offered on Friday and from 85 7/8 bid, 86 3/8 offered on Dec. 23, and the term loan A quoted at 92¼ bid, 93¼ offered, up from 92 bid, 93 offered on Friday and from 89½ bid, 90¼ offered on Dec. 23.

Meanwhile, a second trader had the term loan B quoted at 88½ bid, 89½ offered, up from 86½ bid, 87½ offered on Friday and from 85½ bid, 86¼ on Dec. 23, and the term loan A quoted at 92¼ bid, 93¼ offered, up from 92 bid, 93 offered on Friday.

Clear Channel outlines options

Some of the options that Clear Channel is considering include obtaining incremental bank debt and issuing new senior secured or unsecured debt, with proceeds earmarked for the repayment of existing debt, including its legacy notes.

Also being evaluated is an amendment to the company's existing credit facility to permit the incurrence of additional secured or unsecured debt and to allow extensions of revolver and term loan maturities.

Furthermore, the company said in its Dec. 24 press release that it could also do a debt-for-debt exchange with existing holders.

Clear Channel is a San Antonio-based media and entertainment company.

Freescale better with market

In more trading happenings, Freescale Semiconductor Inc.'s extended term loan B saw quite a bit of positive momentum as the secondary was up by anywhere from ¼ to ¾ of a point on the day, depending on the name, according to a trader.

The trader explained that 2010 ended on a strong note and that tone appears to be continuing into the new year as buyers flooded into the market on Monday.

As an example of the strength in the market, the trader pointed to Freescale's extended term loan B, which was quoted at 98 bid, 98½ offered, up from the morning's opening levels of 97¼ bid, 97¾ offered.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the automotive, consumer, industrial and networking markets.

CommScope plans term loan

Moving to the primary, CommScope emerged on Monday with a proposed $1 billion seven-year term loan that will be launched with a bank meeting on Wednesday at 9:30 a.m. ET at the W Hotel in New York, according to a market source.

Price talk on the loan has not yet been announced, the source said.

The company's $1.4 billion senior secured credit facility also includes a $400 million asset-based revolver that was already launched to investors on Dec. 8.

JPMorgan is the lead bank on the deal that will be used to help fund the acquisition of the company by the Carlyle Group for $31.50 per share in cash. The transaction is valued at $3.9 billion.

Of the total revolver amount, up to $215 million can be used to fund the buyout.

CommScope selling notes

Other funds for the purchase of CommScope, a Hickory, N.C.-based provider of infrastructure services for communication networks, will come from high-yield bonds and $1.75 billion of equity.

Initially, it was thought that the company would get $2.25 billion of senior secured notes. However, in recent filings with the Securities and Exchange Commission, it was revealed that this debt could come in the form of a term loan and notes.

As a backup for this debt, the company has received a commitment for a $2.25 billion senior secured bridge loan.

Closing on the buyout is expected in the first quarter. Stockholder approval was obtained on Dec. 30, and the company was granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in November.

EquiPower coming soon

EquiPower Resources Holdings has set a bank meeting for Thursday afternoon to launch a proposed $525 million secured credit facility that is being led by Barclays, according to a market source.

The facility consists of a $100 million revolver and a $425 million seven-year term loan, the source said, adding that price talk is not yet available.

Proceeds will be used to fund the acquisition of Milford Power, the owner of a 548 megawatt combined cycle gas turbine power plant located in Milford, Conn., and to fund a distribution to the sponsor - Energy Capital Partners LLC.

The transaction is expected to close early in the first quarter following receipt of all necessary approvals.

EquiPower is a Hartford, Conn.-based competitive power generation company.

Houghton readies launch

Houghton International is planning on holding the bank meeting for its proposed $365 million senior secured credit facility (B+) sometime next week, although a firm date has not yet been established, a market source told Prospect News.

Previously, the deal was labeled as January business, with mid-month being the targeted timeframe.

The facility consists of a $50 million revolver and a $315 million term loan B. Price talk is not yet out.

On a preliminary basis, some pro rata lenders were already approached about the transaction in December. One source had said at that time that his expectation is for the revolver to fill out fairly easily and that those pro rata lenders could take some of the term loan as well.

Houghton lead banks

Deutsche Bank, Bank of Ireland and GE Capital are the joint lead arrangers on Houghton International's credit facility, with Deutsche the left lead.

Proceeds will be used to refinance existing senior secured debt and to fund the acquisition of Royal Dutch Shell plc's Metalworking and Metal Rolling Oils business, a specialty fluid manufacturer in the metal working and metal rolling fluids marketplace.

The transaction is anticipated to close early this year, subject to regulatory approval.

Without synergy adjustments, senior leverage will be around the mid 2 times, and total leverage will be in the high 3 times.

Houghton is a Valley Forge, Pa.-based developer and producer of specialty chemicals, oils and lubricants for the metalworking, automotive, steel and aluminum industries.

Gavilon closes

Gavilon LLC, an Omaha-based commodity management firm, completed its acquisition of the DeBruce Cos., a Kansas City, Mo.-based agricultural firm, according to a news release.

To help fund the transaction, Gavilon got a new $775 million term loan (Ba3/BB+) priced at Libor plus 425 basis points with a 1.75% Libor floor. The loan was sold at an original issue discount of 98½ and has 101 soft call protection for one year.

During syndication, the term loan was downsized from $900 million.

BNP Paribas, Bank of America, JPMorgan and Morgan Stanley acted as the lead banks on the deal.

The company also increased its existing asset-based revolver to $2.5 billion from 1.7 billion. The revolver size had been talked in the area of $2.25 billion to $2.5 billion before firming at the high end.

Pricing on the revolver remained unchanged at Libor plus 275 bps with a 50 bps unused fee.

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