Ntelos reduces spreads; Corel cuts deal size, ups pricing; Builders FirstSource trims B size

By Sara Rosenberg

New York, Feb. 8 - Ntelos Inc. cut pricing on all tranches contained in its way oversubscribed $660 million senior secured credit facility on Tuesday and even added a step down to its first-lien term loan. Meanwhile, Corel Corp. restructured its deal, downsizing the first-lien term loan and modifying pricing on the entire facility, and Builders FirstSource Inc. downsized its B loan after upsizing its bond deal.

Ntelos reverse flexed its $400 million first-lien term loan (B2) to Libor plus 250 basis points from Libor plus 275 basis points and added a step down to Libor plus 225 basis points if leverage falls below 4x, according to a market source.

In addition, the $225 million second-lien term loan (B3) was reverse flexed to Libor plus 500 basis points from Libor plus 550 basis points.

And, lastly, the $35 million revolver (B2) was reverse flexed to Libor plus 250 basis points from Libor plus 275 basis points, the source said.

Both term loan tranches were offered to investors at par.

Some positives that worked in favor of the deal are relatively low leverage - 5x through the second lien and 3.1x through the first lien - and it being a pretty straightforward deal from a credit perspective.

Morgan Stanley Senior Funding Inc. and Bear Stearns & Co. Inc. are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley the left lead and administrative agent.

Proceeds from the will be used to help in the recapitalization and sale of the company to affiliates of Quadrangle Capital Partners LP and Citigroup Venture Capital.

In the first step of the transaction, Ntelos will refinance its existing debt and repurchase up to 75% of its existing equity in a self-tender offer at a price of $40 per common share.

Following that step, Quadrangle and CVC will purchase up to 24.9% of the post-recapitalization equity of the company, also at a price of $40 per share.

And, after receipt of regulatory approvals, Quadrangle and CVC will acquire the remainder of the company's equity, at the same $40 per share price, in a merger transaction.

The closings of the refinancing and initial stock repurchase by the company are not conditioned on the sale of any equity to Quadrangle and CVC.

Ntelos is a Waynesboro, Va., regional integrated communications provider.

Corel downsizes, ups pricing

Corel reduced the size of its five-year first-lien term loan B to $75 million from $95 million as the syndicate opted to reduce the size of the dividend payment being made with proceeds from the deal by $20 million, according to a market source.

Furthermore, pricing on the first-lien term loan and the $15 million five-year revolver was flexed up to Libor plus 425 basis points from Libor plus 375 basis points, and pricing on the $55 million 51/2-year second-lien term loan was flexed up to Libor plus 800 basis points from Libor plus 725 basis points.

"The first and second lien are now full," the source said, adding that these new pricing levels are where the deal is expected to settle.

The revolver has a 50 basis point commitment fee.

The second lien has call protection of 103 in year one, 102 in year two and 101 in year three.

Commitments are due from investors on Wednesday.

Credit Suisse First Boston is the sole lead arranger on the now $145 million deal.

Corel, a portfolio company of Vector Capital, is an Ottawa, Canada-based provider of software solutions.

Builders FirstSource cuts size

Builders FirstSource reduced the size of its six-year first-lien term loan to $225 million from $250 million after the company priced a bond deal that was upsized by $25 million, according to a market source.

The upsized $275 million seven-year floating-rate note offering priced on Tuesday at par to yield Libor plus 425 basis points. Price talk was Libor plus 425 to 450 basis points.

Prior to the size changes, Builders FirstSource's term loan was talked at Libor plus 275 basis points. Whether this price talk changed with the downsizing was unavailable prior to press time.

The now $350 million credit facility (B1/B+) also contains a $110 million five-year revolver talked at Libor plus 250 basis points and a $15 million six-year prefunded letter-of-credit facility talked at Libor plus 275 basis points.

UBS and Deutsche Bank are the lead banks on the deal, with UBS the left lead.

Proceeds from the credit facility and the bonds will be used to pay a $237 million dividend and repay existing debt.

Builder FirstSource is a Dallas supplier of building products to professional, large-scale homebuilders.

UPC sees some early orders

UPC Financing Partnership, a subsidiary of Denver-based broadband network business UnitedGlobalCom Inc., has gotten a couple of early commitments in on its $600 million term loan H and the deal is expected to continue to go well since investors know the credit and demand for paper is strong.

"Guys are familiar with the company because there's so much existing debt out there. [And], the market is hot so that really helps," a market source said.

According to the source, about two or three orders came in for the deal even before the bank meeting in Los Angeles took place on Tuesday.

As for the bank meeting itself, "about 10 to 15 accounts were there. No dial-in number," the source said, adding that the Los Angeles launch was a good first step for the company as management gears up for the "big meeting" in New York on Thursday, which accounts will have the option to attend either in person or by phone.

The term loan H, which is being offered to investors at par and contains soft call protection of 101 for year one, is talked at Libor plus 300 basis points with a step down to Libor plus 275 basis points when leverage falls below 4x.

In addition, UPC Distribution Holdings BV, the wholly owned subsidiary of UnitedGlobalCom that holds and operates broadband network business in 11 European countries, is working on getting a new €850 million term loan G talked at Libor plus 275 basis points. The euro tranche does not contain a call protection provision.

Bank of America, Royal Bank of Scotland and ABN Amro are the lead banks on both term loans.

Proceeds from the two term loans will be used to refinance the company's existing term loan B and the existing term loan C, which carry an interest rate of Libor plus 550 basis points.

The euro term loan G was launched in January to new and existing banks. However rollover commitments from lenders who currently hold positions in the company's euro-denominated term loan B paper that is being refinanced are expected to account for a large chunk of the deal.

UPC's $525 million term loan F that was recently obtained via TD Securities Inc. and BNP Paribas will remain in place and keep its current pricing of Libor plus 350 basis points, for now. However, after June, the pricing can step down to Libor plus 300 basis points if leverage gets below 4x.

Worldspan revises price talk

Market chatter is that Worldspan LP has modified price talk on its newly upsized $450 million five-year term loan to a range of Libor plus 250 basis points to Libor plus 275 basis points from previous talk that only included Libor plus 250 basis points, according to a market source.

The term loan was increased by $50 million on Monday after the company priced a $300 million floating-rate note offering that was downsized from $350 million. The notes priced at par to yield Libor plus 625 basis points, wide of the Libor plus 575 to 600 basis point price talk, and during trading hours on Tuesday, levels on the bonds went down into the 99 1/8 to 99 7/8 context.

Worldspan's $490 million senior credit facility (B2/B) also contains a $40 million five-year revolver with an interest rate of Libor plus 250 basis points.

JPMorgan and UBS are joint bookrunners on the deal, with JPMorgan the left lead, and Lehman Brothers, Deutsche Bank Securities and Goldman Sachs & Co. are all agents as well.

Proceeds from the facility, along with proceeds from the notes offering, will be used to help fund the tender offer for the company's 9 5/8% senior notes, refinance existing bank debt, redeem preferred stock issued by parent company Worldspan Technologies Inc. and prepay and terminate sponsor advisory fees and dividends on Worldspan Technologies class B common stock.

Any remaining proceeds will be used for general corporate purposes.

Worldspan is an Atlanta operator of computerized reservation systems.

Del Monte closes

Del Monte Foods Co. closed on its $950 million senior secured credit facility (Ba3/BB) consisting of a $150 million seven-year term loan B, a $450 million six-year term loan A and a $350 million six-year revolver, according to a company news release. All tranches are priced with an interest rate of Libor plus 150 basis points.

The term loan B was originally launched with price talk of Libor plus 175 basis points but was reverse flexed during syndication.

Bank of America, Morgan Stanley and JPMorgan were the lead banks on the deal, with Bank of America the left lead.

Proceeds from the credit facility, along with proceeds from $250 million 6¾% 10-year senior subordinated notes, were used to help fund the repurchase of the company's $300 million 9¼% senior subordinated notes due 2011 and refinance existing credit facility debt.

Del Monte Foods is a San Francisco producer, distributor and marketer of branded and private label food and pet products.

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