Cinram nosedives on contract termination; Spansion, Chemtura break; Bolthouse tweaks deal

By Sara Rosenberg

New York, Feb. 1 - Cinram International Income Fund's term loan D dropped significantly in trading on Monday after the company announced that Warner Home Video Inc. is terminating its service agreements.

Also in the secondary, Spansion Inc. and Chemtura Corp. both saw their credit facilities free up for trading above the original issue discount prices at which they were sold during syndication.

Meanwhile, over in the primary market, Wm. Bolthouse Farms Inc. came out with a number of changes to its credit facility, including moving some funds from its second-lien term loan to its first-lien term loan and lowering pricing across the board.

And, in more new deal happenings, Dole Food Co. Inc. is getting ready to kick off syndication on a proposed term loan that will be used to refinance existing debt.

Cinram plummets

Cinram's term loan D saw a massive decline during the trading session following news that service agreements with Warner Home Video will terminate on July 31, according to traders.

Warner Home Video revenues for 2009 represented about 28% of the total consolidated revenues of Cinram.

"While we are disappointed with the decision by [Warner Home Video] to end our over six-year relationship as their exclusive service provider of standard DVD products and distribution services, we will nevertheless be working closely with [Warner Home Video] to ensure an orderly transition of the services and ensuring that all affected employees and other stakeholders are given the absolute greatest consideration during this process," said Steve Brown, chief executive officer, in a news release.

On the news, Cinram's term loan D was quoted by one trader in the low 70s, down from around 86½ bid, 88½ offered, and by a second trader at 67 bid, 72 offered.

Cinram is a Toronto-based provider of pre-recorded multimedia products and related logistics services.

Spansion frees up

Spansion's $450 million five-year term loan hit the secondary market on Monday, with levels quoted at par bid, 101 offered on the break and then moving up to par ¼ bid, par ¾ offered, according to a market source.

The term loan is priced at Libor plus 550 basis points with a 2% Libor floor, and it was sold at an original issue discount of 98. The loan includes 101 soft call protection for one year.

During syndication, the Libor floor on the loan was reduced from 2.5% due to strong demand.

Barclays and Morgan Stanley are the lead banks on the exit financing term loan.

Also as part of the exit financing package, the Sunnyvale, Calif.-based maker of flash memory products will be getting a new $65 million ABL revolver; however, different banks are leading this part of the transaction.

Chemtura breaks

Another deal to free up for trading during the session was Chemtura's debtor-in-possession financing credit facility, according to a trader.

The $300 million term loan was quoted at par ¼ bid, par ½ offered, the trader said.

Pricing on the term loan is Libor plus 400 bps with a 2% Libor floor, and it was sold at an original issue discount of 991/2.

Citigroup is the lead bank on the deal that also includes a $150 million revolver priced at Libor plus 400 bps with a 2% Libor floor.

During syndication, pricing on the term loan and the revolver was lowered from Libor plus 425 bps and the discount on the term loan was decreased from 99.

Chemtura is a Middlebury, Conn.-based manufacturer and seller of specialty chemicals and polymer products.

Bolthouse reworks deal

Switching to the primary, Bolthouse Farms made some revisions to tranching and pricing on its $790 million credit facility early on in the day, and gave lenders until 5 p.m. ET on Monday to recommit to the deal, according to a buyside source.

Under the changes, the six-year first-lien term loan (B1/B+) is now sized at $550 million, up from $500 million, and pricing was reduced to Libor plus 350 bps from Libor plus 400 bps. The original issue discount of 99 was left unchanged, the source side.

The 61/2-year second-lien term loan (Caa1/CCC+) is now sized at $175 million, down from $225 million, and pricing was reverse flexed to Libor plus 750 bps from Libor plus 800 bps. Also, the original issue discount was tightened to 99 from 98, and call protection was changed to 102 in year one and 101 in year two from 103 in year one, 102 in year two and 101 in year three.

And, the five-year revolver (B1/B+) was left sized at $65 million, but pricing was reduced to Libor plus 350 bps from Libor plus 400 bps. The 98¾ original issue discount was left unchanged, the source continued.

As before, all tranches carry a 2% Libor floor.

Bolthouse adds accordion

In addition, under the changes, Bolthouse Farms added a $50 million accordion feature under the revolver and/or first-lien term loan, subject to 50 bps of MFN, the buyside source remarked.

Following the modifications, talk was that the deal was still well oversubscribed, and it didn't look like anyone was going to be dropping from the transaction, the source added.

In fact, the deal had been going so well that the commitment deadline had recently been moved up to Monday from Thursday.

Proceeds from the credit facility will be used to repay the company's existing senior credit facility and holdco payment-in-kind perpetual preferred stock.

Although the official launch didn't take place until Jan. 26, the banks were holding some one-on-one calls with investors earlier in that week.

Credit Suisse, Goldman Sachs and Bank of America are the lead banks on the deal.

Bolthouse Farms is a Bakersfield, Calif.-based farmer and distributor of fresh produce, beverages and salad dressings.

Dole readies launch

News emerged on Monday that Dole Food is getting ready to approach the market with a new $850 million seven-year term loan, according to an informed source.

A bank meeting to launch the loan has been scheduled for noon ET on Tuesday.

Deutsche Bank, Bank of America and Wells Fargo are the lead banks on the transaction that will be used to refinance existing term loan debt and notes that mature in 2011.

Price talk on the loan is not yet available, the source said.

Dole Food is a Westlake Village, Calif.-based fruit and vegetables company.

IMS talk expected soon

Also on the new-deal side, the expectation is that official price talk on IMS Health Inc.'s credit facility will come out on Tuesday, well in advance of the Thursday afternoon bank meeting in New York that will launch the deal to U.S. investors, according to a market source.

As was previously reported, market chatter is that the $2 billion term loan is being unofficially guided in the mid-to-high Libor plus 300 bps context.

There is also some speculation that there may be a Libor floor somewhere in the 1.75% to 2% area and an original issue discount in the 98 to 99 range, a second source added.

Of the total term loan amount, about $750 million will be U.S. dollars and about $750 million will be euros. The remaining $500 million is expected to be held by left lead bank Goldman Sachs, and therefore, will not be syndicated.

The deal was launched to European investors this past Thursday through a London bank meeting.

IMS also plans revolver

IMS' $2.275 billion senior secured credit facility (Ba3/BB) will also include a $275 million revolving credit facility.

After the initial commitment letter was obtained from Goldman, the company amended the document to insert commitments from Bank of America, Barclays, HSBC and RBC of $250 million each towards the term loan and $50 million each towards the revolver.

Proceeds from the credit facility will be used to help fund the buyout of the company by TPG Capital and the CPP Investment Board in a transaction valued at $5.2 billion, including the assumption of debt.

Under the acquisition agreement, IMS shareholders will receive $22 in cash per share of common stock.

IMS getting equity, notes

Equity financing for IMS' buyout is expected to total $2.793 billion and other funding is anticipated to come from $1 billion of senior unsecured notes that are backed by a commitment for a $1 billion senior unsecured term loan.

The notes will not be sold in the high-yield market since Goldman Sach's mezzanine fund has decided to invest in them.

Completion of the transaction is expected to occur by the end of the first quarter of 2010, subject to approval of IMS shareholders, regulatory approvals and customary closing conditions. A shareholder meeting to vote on the buyout is set to take place on Feb. 8.

IMS is a Norwalk, Conn.-based provider of market intelligence to the pharmaceutical and health care industries.

Summit Materials closes

In other news, Summit Materials LLC completed its acquisition of Hinkle Contracting Co., a Paris, Ky.-based construction company, according to a news release.

To help fund the transaction, Summit Materials got a new $186.4 million credit facility (B2), consisting of a $50 million four-year revolver and a $136.4 million 41/2-year term loan, with both tranches priced at Libor plus 475 bps with a 2% Libor floor.

The term loan was sold at an original issue discount of 99.

Summit Materials led by three

Citigroup, UBS and Jeffries Finance acted as the joint bookrunners and joint lead arrangers on Summit Materials' new deal, with Citigroup the administrative agent.

During syndication, the revolver was upsized from $37 million, the maturity on the revolver was changed from three years and the maturity on the term loan was changed from 3½ years, pricing on both tranches was reverse flexed from initial talk of Libor plus 500 bps and the 2% Libor floor was established, whereas, at launch, the floor was labeled as still to be determined.

Summit Materials is a Washington D.C.-based company that was formed in early 2009 to acquire and grow companies in the aggregates and heavy-side building materials industry.

Del Monte closes

Del Monte Corp. closed on its new $1.1 billion senior secured credit facility (Baa3), consisting of a $500 million five-year revolver and a $600 million five-year term loan A, with both tranches initially priced at Libor plus 275 bps, according to a news release.

Pricing on the facility can range from Libor plus 200 bps to Libor plus 275 bps based on leverage.

During syndication, pricing on the facility was lowered from initial talk of Libor plus 300 bps and that spread was removed from the pricing grid.

The revolver and term loan A were to lenders as a strip. Commitments of $50 million got a 62.5 bps upfront fee, while commitments of $25 million for a 37.5 bps fee.

Del Monte covenants

Covenants contained in Del Monte's credit facility include a maximum leverage ratio and a minimum fixed-charge coverage ratio.

Bank of America, BMO and Barclays acted as the lead banks on the deal that was completed on Jan. 29.

Proceeds were used to refinance existing debt.

Del Monte is a San Francisco-based producer, distributor and marketer of branded food and pet products.

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