Alliance Laundry, Universal Compression cut pricing; Warner Chilcott nets orders

By Sara Rosenberg

New York, Jan. 7 - Alliance Laundry Holdings LLC reverse flexed its term loan B amazingly only two days after launching, and Universal Compression Holdings Inc. also opted to lower pricing on its term loan B. Meanwhile, Warner Chilcott Corp.'s recently launched deal is said to be moving along nicely as a nice number of commitments have come in on the B loan over the course of the week and a couple of banks signed on to the revolver.

Alliance Laundry reduced pricing on its $200 million term loan B to Libor plus 225 basis points from Libor plus 250 basis points and added a step down in pricing to Libor plus 200 basis points under certain circumstances, according to sources.

The Libor plus 250 basis point pricing on the $50 million revolver was left unchanged.

Lehman is the sole lead bank on the deal.

Proceeds from the $250 million credit facility (B1/B) will be used to help fund the acquisition of Alliance Laundry by Teachers' Private Capital for about $450 million.

Teachers' Private Capital, the private equity arm of the Ontario Teachers' Pension Plan, is buying Alliance Laundry from Bain Capital Partners LLC and other minority shareholders. The management team will continue to hold a significant investment in Alliance Laundry following the close of the transaction.

The transaction, which is expected to close in early February, is subject to financing and customary closing conditions.

Alliance Laundry is a Ripon, Wis.-based designer, manufacturer and marketer of commercial laundry equipment.

Universal Compression reverse flex

Universal Compression reduced pricing on its $400 million seven-year term loan B to Libor plus 175 basis points with a step down to Libor plus 150 basis points from original price talk of Libor plus 200 basis points, according to a market source.

The $650 million senior secured credit facility (Ba2/BB) also contains a $250 million five-year revolver with an interest rate of Libor plus 150 basis points, unchanged since launch.

Wachovia Capital Markets and J.P. Morgan Securities are the joint lead arrangers on the deal.

Proceeds will be used to redeem the $440 million of 8.875% notes, repay $82 million of term debt and $50 million outstanding under the existing revolver, and for working capital needs and general corporate purposes. The 8.875% notes are callable beginning Feb. 15, 2005 at a price of 104.438.

Universal Compression is a Houston natural gas compression services company.

Warner Chilcott going well

Syndication of Warner Chilcott's $1.64 billion senior secured credit facility (B) is "doing extremely well" with commitments already in on the institutional portion and four institutions, excluding the four agent banks, have already signed on to senior managing agent roles on the revolver, according to a market source.

The facility consists of a $1.25 billion seven-year term loan B talked at Libor plus 275 basis points, a $240 million seven-year delayed-draw term loan talked at Libor plus 275 basis points with a 137.5 basis point commitment fee and a $150 million six-year revolver talked at Libor plus 250 basis points with a 50 basis point commitment fee.

"I heard they have about $500 million in the book," a second market source said about the term loan B.

A bank meeting was held this past Tuesday to launch the deal and the launch saw "huge" attendance as the room overflowed with interested parties, the source said, adding that one of the key factors working for the deal's expected success is the amount of free cash flow that the company generates.

The term loan B is being offered to investors at par.

Commitments are due the end of next week.

Deutsche Bank and Credit Suisse First Boston are joint lead arrangers and joint bookrunners on the deal with Deutsche the left lead. CSFB is administrative agent, Deutsche is syndication agent and JPMorgan and Morgan Stanley are co-documentation agents.

Proceeds from the term loan B, along with proceeds from a $750 million senior subordinated notes offering, will be used to help fund the acquisition of Warner Chilcott plc by DLJ Merchant Banking, JP Morgan Partners, Bain Capital and Thomas H. Lee.

The delayed-draw is for one-year and proceeds will be used for "product acquisition," the source said.

Warner Chilcott is a U.K.-based branded pharmaceutical manufacturer and marketer

Murray Energy sets launch

Murray Energy Corp. has scheduled a bank meeting for Wednesday to launch its proposed $425 million credit facility, according to a market source. Previously it was known that the deal would launch during the Jan. 10, but a specific date was unavailable.

The facility consists of a $25 million revolver, a $150 million first-lien term loan and a $250 million second-lien term loan.

Price talk on the tranches should emerge early in the Jan. 10 week, the source added.

Goldman Sachs is the lead bank on the refinancing deal.

DynCorp zeroing in on timing

DynCorp International LLC is getting closer to picking a specific launch date, as the deal is now set to launch some time during the week of Jan. 17 as opposed to the previous timetable of mid-to-late January, according to a market source.

The $420 million credit facility consists of a $75 million revolver and a $345 million term loan. Price talk is not expected to surface until early in the week of the bank meeting, the source said.

Goldman Sachs and Bear Stearns are the lead banks on the deal, with Goldman the left lead.

Proceeds from the credit facility and a bond offering will be used to help fund Veritas Capital's acquisition of DynCorp from Computer Sciences Corp. for $850 million, with $775 million in cash payable at closing plus $75 million of senior preferred stock. The acquisition is expected to be completed in the first quarter of 2005.

DynCorp is a Fort Worth, Texas, provider of mission critical support to its customers, primarily the U.S. government.

Gate Gourmet holds steady in wake of downgrade

Gate Gourmet Inc.'s U.S. dollar term loan B1 was still trading around 97 on Friday, according to a market source, even after Standard & Poor's downgraded the company's ratings to D after, as anticipated, the company missed its interest payments.

When asked whether levels have hung in at the high 90 context because lenders are relatively confident about recovery values in a worst-case scenario, the source responded, "they must be."

"They did not make the amortization payments on the loans or the interest payment on the mezzanine debt," the source added.

These payments were technically due Dec. 31, although the company was given until late this past week under the grace period to make good on the payments.

Because of the company's failure to meet these debt requirements, S&P lowered its corporate credit rating to D from BB-, its senior-secured credit facilities to D from BB and junior-secured mezzanine loan facility to D from BB-.

S&P also placed its 1 bank loan recovery rating on Gate Gourmet LLC on CreditWatch with negative implications.

Nothing has been decided by the bank loan lenders in terms of a course of action regarding this event of default, but various options are being reviewed and it is anticipated that the loan group will hold a call early in the July 10 week to discuss the situation.

Just what those options might entail is still unclear, but the company may need to completely amend and restate its credit facility, get an equity infusion, or worst-case scenario, be forced into Chapter 11, a source previously explained.

In December, the company approached lenders asking to defer the loan amortization payments due Dec. 31 until April 1, 2005 and waive financial covenants for Dec. 31 due to liquidity concerns. The company had also asked mezzanine lenders to defer the interest payments. However, lenders opted not to sign off on the waiver.

Gate Gourmet is a Zurich, Switzerland-based airline catering company.

Knowledge Learning closes

Knowledge Learning Corp. closed on its $640 million credit facility (B1/BB-) on Friday, according to a market source. BNP Paribas, UBS and Credit Suisse First Boston acted as joint lead arrangers on the deal, with BNP on the left.

The facility consists of a $540 million seven-year term loan B with an interest rate of Libor plus 250 basis points and a $100 million five-year revolver with an interest rate of Libor plus 200 basis points. The term loan B was reverse flexed from Libor plus 300 basis points, and the revolver was reverse flexed from Libor plus 250 basis points during syndication.

Proceeds are being used to help fund the acquisition of KinderCare Learning Centers Inc. for about $550.3 million in cash and the assumption of about $490 million of debt.

Knowledge Learning is a San Rafael, Calif., provider of early childhood education programs and services. KinderCare is a Portland, Ore., provider of early childhood education and care to children between the ages of six weeks and 12 years.

Leap Wireless closes

Leap Wireless International Inc. (Cricket Communications Inc. as borrower) closed on its $650 million credit facility (B1/B-) on Friday, according to a market source. Banc of America Securities LLC, Goldman Sachs Credit Partners LP and Credit Suisse First Boston LLC were the lead banks on the deal.

The facility consists of a $500 million six-year term loan with an interest rate of Libor plus 250 basis points and a $150 million five-year revolver with an interest rate of Libor plus 250 basis points and a 75 basis point commitment fee.

Proceeds from the term loan are being used to redeem Cricket's existing $350 million 13% senior secured notes, pay about $42 million of call premium and accrued interest on the notes, repay about $41 million in principal amount of debt and accrued interest owed to the Federal Communications Commission, and pay associated transaction fees and expenses. Furthermore, the term loan is expected to provide the company with additional proceeds of about $57 million for general corporate purposes, including working capital and potential acquisitions.

Leap is a San Diego, Calif., mobile wireless services company.

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