Green Tree breaks; Hawker slides on contract cancellations; Multiplan zooms in on pricing

By Sara Rosenberg

New York, Dec. 15 - Green Tree Financial's credit facility allocated and freed up for trading, with the term loan B quoted a little higher than the discount price at which it was sold during syndication, and Hawker Beechcraft Acquisition Co. LLC's term loan B softened with news of pulled contracts.

Moving to the primary market, MultiPlan Inc. narrowed down pricing on its incremental term loan to the high end of talk but, at the same time, the Libor floor was reduced.

Also, Cooper-Standard Automotive Inc.'s debtor-in-possession term loan is coming along well ahead of the Wednesday commitment deadline and the expectation is that the deal will wrap in line with initial talk, and Warner Chilcott plc is anticipated to close at original talk as well.

Green Tree frees up

Green Tree Financial's credit facility hit the secondary market early on in the trading session, with the term loan B seen quoted above its original issue discount price, according to an informed source.

The $350 million term loan B was quoted at 95½ bid, 96 offered, the source said.

Pricing on the term loan B is Libor plus 575 basis points with a 2.25% Libor floor, and it was sold at an original issue discount of 95.

During syndication, pricing was increased from initial talk of Libor plus 500 bps and the original issue discount widened twice - first from the 97 area to the 96 area and then to 95.

Amortization on the term loan B is 2% per quarter.

Green Tree also getting revolver

Green Tree Financial's $380 million senior secured credit facility (B1/B+) also includes a $30 million revolver.

Deutsche Bank and Credit Suisse are the joint lead arrangers, with Deutsche the left lead.

Proceeds will be used to repay debt and fund a dividend.

Green Tree is a fee-based servicing company that provides third-party servicing for consumer loans.

Hawker Beechcraft falls

Hawker Beechcraft's term loan B gave up some ground on Tuesday after the company announced that it has received cancellation notices from NetJets Inc. for a significant number of aircraft previously contracted to be delivered over several years beginning in 2011, according to a trader.

The impact of the cancellations will be to reduce the company's current backlog by about $2.6 billion.

The company went on to say that NetJets, while a considerable source of backlog, was not expected to provide it with any substantial revenue during 2009 or 2010 and has historically not represented more than 10% of its annual revenue.

Following the news, Hawker Beechcraft's term loan B was quoted at 73 bid, 75 offered, down from 75½ bid, 77½ offered, the trader said.

Hawker Beechcraft expected earnings

Also on Tuesday, Hawker Beechcraft came out with some financial expectations, including that revenue for the fourth quarter is estimated to be about $1.1 billion, bringing estimated full year revenue to roughly $3.2 billion.

Operating income for the fourth quarter is expected to be between about zero to a loss of $15 million, with full-year 2009 operating loss estimated to be between $725 million and $740 million.

Adjusted EBITDA for the full year is expected to be between $95 million and $110 million after adjusting for certain non-recurring items expected to have an approximate net $330 million negative effect on operating income.

After removing the cancelled NetJets orders from backlog and considering the anticipated sales and order activity for the fourth quarter, backlog is expected to be about $3.5 billion at Dec. 31.

Hawker Beechcraft is a Wichita, Kan., manufacturer of business, special-mission and trainer aircraft.

Freescale softens

Freescale Semiconductor Holdings I Ltd.'s old term loan headed lower as the company announced plans to make use of a PIK option on its notes, according to a trader.

The old term loan was quoted at 87¼ bid, 88¼ offered, down from 87½ bid, 88½ offered, the trader said.

In an 8-K filed with the Securities and Exchange Commission, Freescale revealed that it has elected, for the interest period ending on June 15, 2010, to pay PIK interest on its 9 1/8% cash/9 7/8% PIK senior notes due 2014.

This move is being done in order to enhance liquidity.

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

MultiPlan sets pricing

Switching to new deal happenings, MultiPlan zeroed in on pricing for its $315 million incremental term loan (B1), firming the spread at Libor plus 425 bps compared to the previous guidance that was circulating at Libor plus 400 bps to 425 bps, according to a market source.

Furthermore, there was a change to the Libor floor as it is now set at 2%, down from previous talk of 2.25%, the source said.

As before, the term loan is being sold at an original issue discount of 98.

Goldman Sachs, Bank of America and Credit Suisse are the lead banks on the deal that will be used to refinance term loan debt at Viant Inc. in connection with the acquisition of Viant by MultiPlan.

MultiPlan amending loan

MultiPlan is also in market with an amendment to its existing credit facility that would allow for the acquisition to be completed and increase pricing.

Specifically, the amendment calls for pricing on the existing credit facility to be raised to Libor plus 325 bps from Libor plus 250 bps.

Lenders would also get a 25 bps amendment fee.

Closing on the acquisition is expected before the end of the year, subject to satisfaction of closing conditions including customary regulatory approvals.

MultiPlan is a New York-based provider of health care cost management services. Viant is a Naperville, Ill.-based provider of health care payment services.

Cooper-Standard going well

Cooper-Standard Automotive's $175 million debtor-in-possession term loan has been receiving interest from lenders since launching with a conference call last Wednesday, enough so that the transaction is anticipated to get done at original terms, according to a market source.

The DIP term loan, which is being led by Deutsche Bank, is being talked at Libor plus 650 bps with a 2% Libor floor. There is no original issue discount.

Maturity on the new DIP loan is Aug. 3, 2010, the same as the maturity on the existing DIP loan that is being refinanced and repaid at 101.

Through this transaction, Cooper-Standard is basically just trying to reprice its existing $175 million DIP term loan, which carries an interest rate of Libor plus 950 bps and includes a 3% Libor floor.

Cooper-Standard, a Novi, Mich.-based manufacturer and marketer of systems and components for the automotive industry, obtained the existing DIP loan a few months ago when the primary market was not nearly as strong.

Warner Chilcott builds book

Warner Chilcott's $350 million add-on to its term loan B-1, which was just launched with an announcement on Monday, is expected to wrap at original terms as investors jumped on the deal prior to the Tuesday close of business commitment deadline, according to a market source.

The term loan B-1 add-on is priced at Libor plus 350 bps with a 2.25% Libor floor, which is the same as the existing term loan B-1 pricing.

The original issue discount on the add-on is being talked at 99 5/8. By comparison, the existing term loan B-1 was sold at an original issue discount price of 99 when it was syndicated not too long ago.

Bank of America is the left lead bank on the deal that will be used to refinance the company's 8.75% senior subordinated notes due 2015.

In connection with this new deal, the company is eliminating its unfunded delayed-draw term loan that was established to fund the put of bonds, since that put didn't occur.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

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