Intelsat resets launch of $650 million credit facility for Jan. 3 week

By Sara Rosenberg

New York, Dec. 23 - It now looks like the Intelsat launch is back on - after being delayed at the end of November due to a satellite failure - with the company now expected to hold its bank meeting during the week of Jan. 3, according to a market source.

The credit facility is still expected to be sized at $650 million consisting of a $300 million revolver and a $350 million term loan B, the source said, adding that price talk is still unavailable on the deal.

In November, Intelsat announced that its Americas-7 satellite experienced a sudden and unexpected electrical distribution anomaly that caused the loss of the spacecraft. The satellite was self-insured by Intelsat.

More importantly though, under the terms of the purchase agreement with Zeus Holdings Ltd. - the reason which the debt is being obtained in the first place - the loss of the satellite allows Zeus to cancel the acquisition.

It was on that news that the syndicate decided to delay the launch of its credit facility and bond offering indefinitely.

The Americas-7 satellite was actually recovered in December. However, because of the investigation into the satellite's mysterious problems, Intelsat opted to temporarily delay the launch of its IA-8 satellite - another move that could have potentially impacted the acquisition agreement.

Although no comment has come out from Zeus regarding the Intelsat deal, the transaction is making some progress as the company announced Wednesday that it received the necessary regulatory approval from the U.S. Federal Communications Commission. Shareholder approval had already been received earlier this year.

Deutsche Bank, Credit Suisse First Boston and Lehman Brothers are the lead banks on the credit facility, with Deutsche listed on the left.

Zeus, a company formed by a consortium of funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira, originally agreed to acquire Intelsat, a Pembroke, Bermuda-based satellite communications company, in a transaction valued at about $5 billion, including about $2 billion of existing net debt.

ON Semiconductor closes

ON Semiconductor Corp. closed on its new $645 million seven-year term loan G (B3) with an interest rate of Libor plus 300 basis points, according to a company news release. Originally the term loan was expected to carry an interest rate of Libor plus 275 basis points.

Credit Suisse First Boston and JPMorgan acted as joint lead arrangers on the Phoenix semiconductor company's deal.

Proceeds are being used to refinance the company's existing senior secured credit facilities and to fund the purchase of all outstanding 12% senior secured notes due 2008 and 12% senior secured notes due 2010.

Of the $645 million term loan, about $325 million was used to fund the tender offer. The company also used about $71 million of cash on hand for the tender offer as well.

"This transaction significantly reduces our interest burden, simplifies our financial structure by the elimination of two series of secured bonds and extends the maturity of our debt," said Donald Colvin, senior vice president and chief financial officer, in a company news release. "The purchase of $325 million aggregate principal amount of our 2008 and 2010 senior secured notes concludes a year of significant capital structure improvement. With this transaction and assuming no change in Libor, we have reduced our annualized net interest expense by over $75 million as compared to the end of 2003."

Tuesday Morning closes

Tuesday Morning Inc. closed on its new $210 million five-year senior credit facility, according to an 8-K filed with the Securities and Exchange Commission Thursday. Wachovia Capital Markets LLC and Wells Fargo Bank acted as co-lead arrangers, with Wachovia the sole bookrunner and administrative agent, and Wells Fargo a co-syndication agent.

Seven banks participated in the syndicate.

The new facility has the ability to be expanded to $300 million, subject to bank approval.

Security is inventory, deposit accounts and capital stock of the company's subsidiaries.

The facility replaces the company's existing $160 million facility and a $55 million overadvance facility which was terminated on Dec. 22.

Tuesday Morning is a Dallas closeout retailer of upscale home furnishings, gifts and related items.

Cooper-Standard closes

The acquisition of Cooper-Standard Automotive by an entity formed by The Cypress Group and Goldman Sachs Capital Partners for about $1.165 billion in cash from Cooper Tire & Rubber Co. was completed, according to a company news release.

To help fund the transaction, Cooper-Standard got a new $475 million credit facility (B1/BB-) consisting of a $115 million seven-year term loan B that will be U.S. dollar denominated but borrowed by a Canadian subsidiary with an interest rate of Libor plus 200 basis points, a $185 million seven-year term loan C that will be borrowed by a U.S. subsidiary with an interest rate of Libor plus 200 basis points, a $100 million six-year revolver with an interest rate of Libor plus 250 basis points, a $25 million multi-currency six-year revolver with an interest rate of Libor plus 250 basis points and a six-year term loan A in the Canadian equivalent amount of $50 million with an interest rate of Libor plus 250 basis points.

Both the term loan B and the term loan C were reverse flexed during syndication from Libor plus 250 basis points.

Deutsche Bank and Lehman Brothers acted as joint lead arrangers and joint bookrunners, with Deutsche listed on the left, and Goldman Sachs and UBS acted as co-documentation agents.

Cooper-Standard is a Novi, Mich.-based manufacturer of fluid handling systems, body sealing systems, and active and passive vibration control systems.

Goodman closes

Apollo Management LP completed its acquisition of Goodman Global Holdings Inc. a Houston heating and air conditioning manufacturer, according to a company news release.

To help fund the transactions, Goodman got a new $500 million credit facility (B2/B+) consisting of a $350 million seven-year term loan B with an interest rate of Libor plus 225 basis points and a step down to Libor plus 200 basis points if total leverage is below 43/4x, and a $150 million six-year revolver with an interest rate of Libor plus 225 basis points.

The step down on the term loan B pricing was added during syndication.

Furthermore, according to the original term sheet that was presented to lenders at launch, the term loan B should have initially been priced at Libor plus 250 basis points based on the B2/B+ ratings it received. However, it had been talked at Libor plus 225 basis points from the start since the syndicate expected ratings to be one notch higher.

JPMorgan, UBS and Credit Suisse First Boston were the lead banks on the deal, with JPMorgan the left lead.

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