Allegheny Energy breaks for trading with the term loan B around par 1/2, term loan C around 101

By Sara Rosenberg

New York, March 5 - Allegheny Energy Inc.'s new deal broke for trading on Friday with the term loan B reaching plus par levels and the second lien term loan C reaching 101 levels.

More specifically, the $750 million seven-year term loan B was quoted at par ½ bid, par ¾ offered and the $500 million 71/4-year second lien term loan C was quoted at 101 bid, 101 3/8 offered, according to a trader.

"A little trading happened when the name broke. The management team is great. They came in and did a lot with it. They cut a huge amount of interest off. I'm a positive on the credit," the trader said.

The term loan B (B1/B/BB-) ended up pricing at the low end of price talk with an interest rate of Libor plus 300 basis points, and the second lien term loan C ended up pricing lower than expected with an interest rate of Libor plus 425 basis points. Price talk on the B loan had been Libor plus 300 to 325 basis points, and price talk on the second lien loan had been Libor plus 450 to 475 basis points.

Originally, the term loan B was expected to be sized at $800 million but the company opted to reduce the tranche size by $50 million since it found an extra $50 million in cash on the balance sheet, the trader explained.

Both the term loan B and the term loan C have been obtained at the Allegheny Energy Supply Co. level and were offered to investors at par during syndication.

The $1.55 billion credit facility also contains a $300 million three-year revolver with an interest rate of Libor plus 300 basis points.

Citigroup and Bank of America are the lead banks on the Hagerstown, Md., energy company's deal.

Proceeds from the credit facility will be used to repay and refinance all of the company's bank debt that was restructured in February 2003.

American Achievement oversubscribed

American Achievement Corp.'s $155 million term loan is "going pretty well" as the deal was said to have about $400 million in commitments in the book by Friday morning, according to a market source. The tranche is being talked at Libor plus 275 basis points.

The company's $195 million credit facility, which just launched this past Wednesday, also contains a $40 million revolver.

Goldman Sachs and Deutsche Bank are the lead banks on the deal, with Goldman listed on the left.

Proceeds will be used in combination with a proposed $150 million bond offering to support the acquisition of American Achievement by a new company organized and managed by Fenway Partners from Castle Harlan Inc.

American Achievement is an Austin, Texas, manufacturer and seller of high school and college class rings and yearbooks.

Builders FirstSource shifts

The syndicate has been going out to accounts with another new structure on Builders FirstSource's $405 million senior secured credit facility, which includes an upsized first lien term loan, a downsized second lien term loan and juicier pricing and perks on the second lien piece.

The six-year first lien term loan is now sized at $230 million (B+) compared to previous sizing of $200 million and initial sizing at launch of $150 million. Pricing once again remained unchanged on this tranche at Libor plus 300 basis points, according to a fund manager.

Meanwhile, the 61/2-year second lien term loan is now sized at $85 million compared to previous sizing of $115 million and initial sizing of $165 million. Furthermore, pricing was once again increased, this time to Libor plus 850 basis points from Libor plus 750 basis points. When the deal launched, pricing on this second lien piece was Libor plus 600 basis points.

In addition, a 2% Libor floor as well as an original issue discount of 1% was added to the second lien paper, according to the fund manager. Call protection on the tranche remained at 102 in the first year and 101 in the second year.

When the deal was last changed to increase the first lien piece, decrease the second lien piece and up pricing on the second lien paper, a market source explained that the first lien term loan was oversubscribed so the company opted to shift funds in order to save on interest expense. And, the source explained that pricing on the second lien piece had to be upped because of the increased amount of secured debt ahead of it.

The credit facility also contains a $90 million five-year revolver (B+) with an interest rate of Libor plus 275 basis points, unchanged since launch.

Proceeds will be used to support JLL Partners' recapitalization of the company.

UBS is acting as sole lead arranger and administrative agent, and Bear Stearns is acting as co-arranger and syndication agent.

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

Nebraska Book closes

Nebraska Book Co. Inc. closed on its new $230 million credit facility (B2/B), consisting of a $180 million term loan B with an interest rate of Libor plus 275 basis points and a $50 million revolver with an interest rate of Libor plus 275 basis points, according to a company spokesman.

Originally the deal was launched with a $165 million term loan B and a $50 million revolver for a total credit facility size of $215 million. However, the term loan B was later upsized following pricing of the company's bond offering.

Late February, Nebraska Book and its holding company priced two issues of high-yield notes totaling about $225 million. Nebraska Book Co. Inc., the operating company, priced a downsized $175 million (from $190 million) of eight-year senior subordinated notes at par to yield 8 5/8%, and NBC Acquisition Corp., the holding company, sold about $50 million in proceeds of nine-year senior discount notes at 64.947 to yield 11%.

JPMorgan and Citigroup were the lead banks on the credit facility, with JPMorgan listed on the left.

Proceeds from the bank and bond deals were used to help support Weston Presidio Capital's buyout of the company, help fund bond tender offers and refinance existing bank debt.

Weston Presidio Capital held about 32.1% of the outstanding capital stock of NBC Acquisition Corp., parent company of Nebraska Book. Through this transaction, Weston acquired control over substantially all of the rest of the outstanding capital stock of the company excluding about 6.6% of capital stock that will be held by members of the management.

In connection with the buyout, Nebraska Book and NBC Acquisition completed tender offers - Nebraska Book for its $110 million outstanding principal amount of 8¾% senior subordinated notes due 2008 and NBC for its $76 million outstanding principal amount of 10¾% senior discounted debentures due 2009.

The previous credit facility that was refinanced through this transaction consisted of a $75 million seven-year term loan B with an interest rate of Libor plus 275 basis points and a $50 million five-year revolver an initial interest rate of Libor plus 275 basis points.

Nebraska Book is a Lincoln, Neb., used textbook wholesaler.

D&E closes

D&E Communications Inc. closed on its new $260 million credit facility (Ba3/BB-) consisting of a $25 million 71/2-year revolver with an interest rate of Libor plus 250 basis points, a $50 million 71/2-year term loan A with an interest rate of Libor plus 250 basis points, a $150 million eight-year term loan B with an interest rate of Libor plus 275 basis points and a $35 million term loan at a D&E subsidiary.

SunTrust Bank and CoBank ACB were the lead banks on the deal.

Proceeds were used to restructure debt under the company's previous credit facilities and for general corporate purposes, according to a company news release.

D&E is an Ephrata, Pa., provider of integrated communications services.

MultiPlan closes

MultiPlan Inc. completed its acquisition of the U.S.-based healthcare provider network operations of BCE Emergis Inc. for $213 million in cash.

To help fund this transaction, the New York healthcare network obtained a new $200 million credit facility (B+) consisting of a $180 million five-year term loan with an interest rate of Libor plus 275 basis points and a $20 million five-year revolver with an interest rate of Libor plus 275 basis points.

UBS acted as sole lead arranger and bookrunner on the bank financing.

Also as part of the transaction, General Atlantic Partners LLC made a significant investment for a minority position in MultiPlan.

"By combining the networks, solutions, and people of BCE Emergis, MultiPlan is better positioned than ever to evolve and grow with the needs of our clients, providers and members," said Donald Rubin, founder and chairman of MultiPlan, in a company news release.

"This transaction is a landmark event for MultiPlan. In addition to nearly doubling our client base and significantly increasing our provider network, we have also added outside representation to the board of directors, including General Atlantic Partners, our investor and an exciting new partner for our company."

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