Arby's upsizes term loan; Acco cuts B loan spread; Insight's repriced deal trades in 101s

By Sara Rosenberg

New York, July 21 - Arby's Restaurant Group Inc. upsized its term loan on Thursday, and with this last change in place, allocations are hoped to go out as early as Friday. And, Acco Brands Corp. reduced the spread on its term loan B by 25 basis points.

Meanwhile, Insight Midwest's $1.1 billion term loan C allocated, and the essentially repriced paper was seen trading in the low 101 region.

Arby's increased the size of its term loan to $620 million from $600 million with the additional debt earmarked for the refinancing of some existing debt (so leverage will stay the same) that the company was originally going to leave in place, according to a market source.

Pricing on the term loan remained at Libor plus 225 basis points with a step down to Libor plus 200 basis points when leverage is less than 31/2x. The step down was added during syndication on strong demand.

Arby's now $720 million senior secured credit facility (B1/B+) also includes a $100 million revolver with an interest rate of Libor plus 225 basis points.

Citigroup, Bank of America and Credit Suisse First Boston are the lead banks on the deal.

Proceeds from the new credit facility will be used to fund the acquisition of RTM Restaurant Group and refinance debt.

New York-based holding company Triarc Cos. Inc., parent of Arby's franchise trust - which is the franchisor of the Arby's restaurant system, will acquire RTM for $175 million in cash plus either 10 million shares of its existing class B common stock, series 1, or 10 million shares of newly created nonvoting class B common stock, series 2, that will convert into class B-1.

As part of the transaction, Triarc will provide $135 million cash to fund the acquisition and will consolidate its restaurant operations, including RTM, under Arby's Restaurant Group.

Arby's financing commitments will cover the remaining cash needed to complete the acquisition, including transaction costs, and to refinance some of its own and RTM's existing debt. The company is assuming $420 million of net debt and related prepayment expenses, including about $185 million of RTM's capitalized lease obligations and financing obligations.

Triarc said it will look into creating a publicly traded restaurant company separate from its asset management business.

Acco cuts institutional spread

Acco Brands reverse flexed pricing on its $400 million seven-year term loan B to Libor plus 175 basis points from Libor plus 200 basis points, according to a market source.

Pricing on both the $150 million five-year revolver and $200 million five-year term loan A was left unchanged at Libor plus 200 basis points, the source added.

Citigroup and ABN Amro are the lead banks on the $750 million credit facility (BB-), with Citigroup the left lead.

Proceeds from the term loans will be used to help fund Fortune Brands Inc.'s spinoff of Acco World Corp. and merger of Acco with General Binding Corp. to form a new entity called Acco Brands. Revolver borrowings will be available for general corporate purposes.

Immediately following the merger, Fortune Brands stockholders and Acco World's current minority stockholder will together own 66%, and General Binding's stockholders will own 34%, of the shares of common stock of the new company on a fully diluted basis.

Acco is an Illinois-based supplier of branded office products.

Wastequip shift funds

Wastequip Inc. moved $15 million out of its second-lien term loan and into its first-lien term loan, according to a syndicate document.

The now $155 million six-year term loan B (B2/B+), which was upsized from $140 million, is priced with an interest rate of Libor plus 250 basis points.

The $60 million seven-year second-lien term loan (B3/B-), which was downsized from $75 million, is now priced with an interest rate of Libor plus 600 basis points, the document added.

Wastequip's $255 million credit facility also contains a $40 million five-year revolver (B2/B+) with an interest rate of Libor plus 275 basis points and a 50 basis point commitment fee.

Credit Suisse First Boston is the sole lead arranger on the deal that will be used to help fund DLJ Merchant Banking Partners' leveraged buyout of Wastequip from CIVC Partners.

Wastequip is a Beachwood, Ohio, designer, manufacturer, and marketer of equipment used to collect, process, and transport solid and liquid waste materials.

Petrohawk closes syndication

Petrohawk Energy Corp. closed down syndication of its $550 million credit facility as the $400 million first-lien revolver was more than two times oversubscribed and the $150 million second-lien term loan was over four times oversubscribed attracting more than $600 million in commitments from 40 plus accounts, according to a company news release.

Price talk on the tranche is in the Libor plus 450 to 500 basis points range.

The second-lien facility will be 50% drawn at closing, with the remaining 50% available at the Petrohawk's discretion within 45 days of closing.

Proceeds from the second-lien term loan will be used to help fund Petrohawk's acquisition of Mission Resources Corp.

Under the acquisition agreement, Petrohawk total consideration for the shares of Mission common stock will comprise about 60% of Petrohawk common stock, or roughly 19.2 million shares, and 40% cash - for roughly $135 million in cash payable to Mission shareholders.

In addition, Petrohawk will assume about $170 million of Mission's long-term debt.

Of the $400 million revolver amount, $280 million will be available at closing.

The new revolver replaces the company's existing revolver, but with increased availability due to the increased reserve base and improved commodity prices, the source said.

BNP Paribas is acting as sole lead arranger and bookrunner on the deal.

Petrohawk is a Houston-based oil and gas company.

Insight Midwest term C trades in 101s

Insight Midwest, a subsidiary of Insight Communications Co. Inc., closed the books, closed the deal and allocated its $1.1 billion term loan C (BB-) during Thursday's session with the paper trading in the 101¼ bid, 101½ offered area, according to a trader.

"It never really stopped trading. What they essentially do is roll the repriced deal into the existing deal and so you don't really have to deal with breaking it for trading," the trader explained, adding that the levels on the repriced deal are basically unchanged from recently seen levels.

However, before the amendment process was announced, Insight's existing term loan B had traded as high as 101¾ bid, 102¼ offered, a second trader added.

The term loan C is priced with an interest rate of Libor plus 200 basis points and contains a step down, which was added to the agreement last week, to Libor plus 175 basis points if minimum ratings are Ba3/BB- and leverage is 23/4x.

Following the addition of the step down, everyone who originally committed to the deal agreed to rollover their commitments, a market source said.

The term loan C was used to basically reprice and replace the company's existing $1.1 billion term loan B, which carried an interest rate of Libor plus 275 basis points.

In addition to the repricing, the company amended its existing credit facility to provide some covenant room in terms of the maximum total leverage ratio.

The Bank of New York and Bank of America acted as co-lead arrangers and bookrunners on the deal, with Bank of New York also administrative agent and Bank of America syndication agent. JPMorgan acted as a bookrunner on the deal as well.

Insight Communications is a New York-based cable television system operator.

Toys "R" Us closes

Bain Capital Partners LLC, Kohlberg Kravis Roberts & Co. and Vornado Realty Trust completed their acquisition of Toys "R" Us for $6.6 billion, according to a company news release.

To help fund the leveraged buyout, Global Toys Acquisition LLC, the investment group formed by the three equity sponsors, got a new $2 billion asset-based revolving credit facility.

Deutsche Bank and Bank of America were the lead banks on the deal.

The equity sponsors committed to provide a total of $1.2 billion of equity to help fund the acquisition as well and each of the investors will own equal stakes in the company upon completion of the transaction.

Toys "R" Us is a Wayne, N.J.-based specialty toy retailer.

Allegheny closes

Allegheny Energy Supply Co. LLC closed on its $1.075 billion term loan due 2011 that carries an interest rate of Libor plus 175 basis points and contains a step down to Libor plus 150 basis points, effective under a ratings upgrade.

Pricing on the term loan was reverse flexed from original price talk of Libor plus 200 basis points during syndication on strong demand. The term loan was originally launched with a step down to Libor plus 175 basis points, but this was changed in conjunction with the reverse flex in pricing.

Citigroup acted as the lead arranger on the deal. Bank of America LLC and Credit Suisse First Boston acted as joint bookrunners.

Proceeds were used to refinance the company's existing $738 million term loan and will be used to redeem its 10.25% senior notes due 2007, which have a principal amount of $331 million.

Allegheny Energy Supply is the subsidiary of Greensburg, Pa.-based Allegheny Energy Inc. that owns and operates electric generating facilities.

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