Oriental Trading reverse flexes; Crown Cork repricing sees recommitments before noon

By Sara Rosenberg

New York, July 18 - It's finally official. The long-awaited and long-expected change in pricing of Oriental Trading Co. Inc.'s term loan B was announced on Friday, as the institutional tranche was reverse flexed by 75 basis points.

In other primary news, Crown Cork & Seal Co. Inc.'s proposed repricing of its $450 million term loan B was off to a good start following Friday morning's conference call as some existing investors had already recommitted to the deal by mid-day.

Oriental Trading's term loan B is now priced at Libor plus 275 basis points, down from Libor plus 350 basis points, according to a fund manager.

"They said they expect people to reconfirm their order on that deal. I would imagine we'd stay in. Lack of paper is a big part of it," the fund manager said. He added that the deal was so oversubscribed it wouldn't matter much whether some people changed their minds to commit and in fact it would probably be better for some investors since they would see bigger allocations.

Oriental Trading's credit facility has been expected to reverse flex since day one based on the overwhelming demand the deal received. The $250 million six-year term loan B was oversubscribed before the bank meeting and the $40 million six-year revolver was pretty much spoken for by the lead arrangers and a few other banks.

Credit Suisse First Boston and BNP Paribas are leading the deal.

The Omaha, Neb. direct marketer of novelties and toys is obtaining the facility as part of a recapitalization effort.

As for Crown Cork, "We got some good momentum," a syndicate source told Prospect News. "A handful of guys have recommitted and a good portion of guys are looking to increase, which is good in case anyone decides to drop it."

The Philadelphia supplier of packaging products is looking to reverse flex its term loan B by 125 basis points, dropping the interest rate to Libor plus 300 basis points.

The existing revolver and the euro portion of the term loan B will remain in place as is, the syndicate source added.

Deutsche Bank and Citigroup, who led the credit facility when it first was obtained in February 2003, are the lead banks on the repricing transaction.

Earlier this year, Crown Cork closed on a $1.05 billion credit facility, consisting of a $550 million first lien revolver with an interest rate of Libor plus 400 basis points due Sept. 15, 2006 and a $500 million first lien term loan B due Sept. 15, 2008 with an interest rate of Libor plus 425 basis points. The term loan B is comprised of $450 million and €50 million.

The credit facility was part of a comprehensive refinancing plan that also included the sale of $1.085 billion of 9½% second priority senior secured notes due 2011, €285 million of 10¼% second priority senior secured notes due 2011 and $725 million of 10 7/8% third priority senior secured notes due 2013.

Proceeds from the refinancing plan were used to refinance the company's prior revolver and certain unsecured senior notes.

In the secondary, TransDigm Holding Co.'s new term loan B was quoted at the 101 level on Friday, pretty much in line with where it was quoted after allocating and breaking for trading on Thursday, according to a market professional.

The $375 million credit facility (B1/B+) was recently restructured, following the $100 million upsizing of the company's bond offering, and now consists of a $295 million seven-year term loan B with an interest rate of Libor plus 300 basis points and an $80 million six-year revolver. The term loan B provides for a step-down to Libor plus 275 basis points under certain conditions,

Previously, the facility was expected to consist of a $360 million seven-year term loan B talked at Libor plus 375 basis points and an $80 million revolver talked at Libor plus 350 basis points.

The revolver is now expected to be undrawn at closing as opposed to having $35 million drawn, sources added.

Credit Suisse First Boston and Bank of America are the lead arrangers, and GECC and UBS are co-documentation agents on the deal.

Proceeds will be used to help fund the leveraged buyout of TransDigm by an affiliate of Warburg Pincus and senior members of management from Odyssey Investment Partners LLC

TransDigm is a Richmond Heights, Ohio supplier of proprietary aerospace components.

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