Rockwood term B add-on fills up fast; Aquila term loan attracts lots of interest

By Sara Rosenberg

New York, Sept. 8 - The book on Rockwood Specialties Group Inc.'s $225 million term loan B add-on was already full within hours of Wednesday's launch as existing lenders jumped at the opportunity to increase their positions. And, the term loan portion of Aquila Inc.'s newly launched deal is also said to be going extremely well, with some suggesting that the tranche is receiving almost an overwhelming amount of inquiries.

A little over a month ago, Rockwood closed on its $1.757 billion credit facility (B1/B+). The $985 million seven-year term loan B contained in that original credit package was first launched with a size of $1.05 billion and pricing of Libor plus 275 basis points, but the size was reduced by $65 million because the company opted not to refinance some debt at the businesses it acquired and pricing was reverse flexed by 25 basis points because of strong oversubscription.

Based on this history, it's no surprise that investors were pleased with the opportunity to get some more paper, a market source said.

Rockwood's add-on carries the same terms as the existing term B debt, including pricing of Libor plus 250 basis points.

Credit Suisse First Boston and UBS are the lead banks on the deal.

Proceeds from the add-on will be used to partially repay subordinated term debt.

Rockwood is a Princeton, N.J., specialty chemicals and advanced materials company.

Investors clamor for Aquila

Strong demand has already been received from existing lenders for Aquila's $200 million term loan that just launched Wednesday, according to a market source who explained that investors are scrambling to get some paper since the company is reducing the amount of its term loan debt leaving little to go around.

"They got to fight some guys off on that," a market source said regarding the term loan. As for the $100 million revolver, "I think they got some big tickets in but I don't know for sure," the source added.

The term loan and the revolver are both talked at Libor plus 575 basis points. The revolver, which is expected to be basically undrawn at closing, will also have a 100 basis point commitment fee.

Proceeds from the $300 million unsecured working capital facility will be used to help retire Aquila's existing $430 million secured credit facility, a move that will reduce outstanding debt by about $230 million and lower annual interest expense.

Credit Suisse First Boston is the lead bank on the deal that is expected to close by Sept. 16.

Aquila is a Kansas City, Mo., operator of electricity and natural gas distribution utilities and owner of power generation assets.

Interstate Bakeries active

Interstate Bakeries Corp.'s bank debt was very active in the secondary market on Wednesday at basically unchanged to slightly stronger levels of 95 bid, 96½ offered, according to a trader.

On Tuesday another trader had the paper quoted at 94½ bid, 96 offered, up a couple of points from previous levels of 92 bid, 94 offered.

The increased activity and strengthening of the paper over the last two days has been attributed to investors focusing on the name and increased investor presence as compared to last week.

The Kansas City, Mo., wholesale baker's bank debt saw a somewhat significant backlash after the company announced that it missed its deadline and would delay filing its 10-K annual report for the fiscal year ended May 29 for a second time.

In reaction to the announcement, Moody's Investors Service downgraded Interstate Bakeries' bank debt rating to Caa1 from B2.

As all of this negative news compounded, the bank debt dropped to as low as 91 bid from levels in the low 98s prior to last week's events.

Culligan may launch Friday

Talk is that Culligan International may hold a bank meeting on Friday to launch its proposed credit facility that is said to be sized at $337.5 million, although details of the transaction have not yet "been set in stone," a market source said.

Bank of America, BNP Paribas and Citigroup are the lead banks on the deal.

As contemplated, the facility may contain a $237.5 million seven-year term loan and a $100 million six-year revolver.

Proceeds will be used to help fund Clayton, Dubilier & Rice Inc.'s acquisition of Culligan from Veolia Environnement SA for $610 million.

Culligan is a Northbrook, Ill., manufacturer and distributor of water treatment products and bottled water.

RCN launch near

RCN Corp.'s proposed $460 million exit financing facility has joined the ever growing list of upcoming deals with the loan expected to launch via a bank meeting sometime this month, although a specific date is still unavailable, according to a market source. Deutsche Bank is the sole lead arranger and bookrunner on the deal.

The facility consists of a $285 million seven-year term loan priced at Libor plus 400 basis points, a $25 million five-year letter-of-credit facility priced at 4% with a 50 basis points commitment fee and a $150 million 71/2-year second-lien facility priced at Libor plus 800 basis points, according to filings with the Securities and Exchange Commission.

The term loan amortizes at a rate of 1% during the first six years with the remaining balance due in quarterly installments in the seventh year. The second-lien facility does not have any amortization requirements.

The Princeton, N.J., broadband company filed a prepackaged Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York on May 27 after reaching agreement with its senior secured lenders and an ad hoc committee of holders of its senior notes on a debt restructuring. A joint plan of reorganization and a disclosure statement was filed on Aug. 20. RCN expects to emerge from Chapter 11 in the fourth quarter.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.