Riddell Bell cuts pricing; AAi.FosterGrant, AM General up pricing; Professional Paint allocates

By Sara Rosenberg

New York, Sept. 22 - A number of changes that investors have been looking out for and talking about for some time took place Wednesday, including Riddell Bell Holdings Inc.'s (Bell Sports Corp.) term loan B reverse flex and step down addition, and AAi.FosterGrant Inc.'s and AM General Corp.'s flex up and addition of other enticing credit agreement terms.

Meanwhile, on the secondary front, Professional Paint Inc.'s credit facility allocated, and opening levels were set in the plus par context, although no trading activity was seen in the name during market hours.

Riddell Bell reverse flexed its $110 million term loan to Libor plus 250 basis points and added a step down in pricing to Libor plus 225 basis points under certain conditions, according to a market source. The term loan is being offered at par.

Prior to launch, the term loan was talked at Libor plus 300 basis points. But, at the actual launch, the syndicate went out with price talk of Libor plus 275 to 300 basis points since investor interest was strong even before the loan officially hit the market. The tranche was multiply oversubscribed at tighter price talk within hours of the bank meeting, and the book has just kept building since then leading many to believe that a pricing reduction was soon to come.

Goldman Sachs and Wachovia are joint leads on the deal, with Goldman listed on the left. UBS and Antares are co-documentation agents.

Riddell Bell's $160 million credit facility (B1/BB-) also contains a $50 million revolver with an interest rate of Libor plus 275 basis points. The revolver is being offered at 99 for a $10 million commitment.

Proceeds from the loan, combined with proceeds from a proposed $140 million bond deal that is expected to price Thursday, will be used to help fund Fenway Partners Inc.'s acquisition of Bell Sports.

Under the acquisition agreement, Fenway will purchase Bell Sports from an investor group including GarMark Partners LP, Wachovia Investors Inc. and Chartwell Investors, for about $240 million. The transaction will merge Bell Sports and Riddell Sports Group, which Fenway purchased in June 2003.

Bell Sports is an Irving, Texas, marketer of helmets and accessories for bicycling and other action sports. Riddell is a Chicago provider of football helmets and other branded sporting goods, equipment reconditioning services and sports collectibles.

AAi.FosterGrant makes changes

AAi.FosterGrant made a number of modifications to its $115 million credit facility, including reducing the term loan B size to $90 million from $100 million, adding a $10 million term loan A tranche, upping pricing, adding soft call protection of 102 in year one and 101 in year two, and changing the amortization schedule, according to a market source.

The six-year term loan B is now priced at Libor plus 500 basis points, up from initial price talk of Libor plus 350 basis points, and is being offered at par. The $15 million five-year revolver and the term loan A are both priced at Libor plus 450 basis points.

Both the term loan A and the term loan B have amortization schedules although specific details were not immediately available.

Since launching in early August, pricing on AAi.FosterGrant's term loan B has been up in the air. Around mid-August rumor had it that the tranche would be flexed up to somewhere in the Libor plus 400 basis points range in an attempt to capture investor attention. The deal was said to be falling through the cracks since it was August - a time well known for vacations - and people who were present were caught up in other deals. And then, early this month, talk was pretty much right on the mark as investors anticipated that pricing would go up to Libor plus 500 basis points, call protection of 102 in year one and 101 in year two would be added and the amortization schedule would be improved.

Bear Stearns is the sole lead bank on the deal that will be used to help fund the acquisition of Magnivision Inc. from American Greetings Corp. in an all-cash transaction.

AAi.FosterGrant is a Smithfield, R.I., eyewear and jewelry company. Magnivision is a reading glasses company.

AM General flexes higher

AM General finalized changes to its credit facility, increasing pricing on the $400 million seven-year first-lien term loan to Libor plus 450 basis points from Libor plus 300 basis points and increasing pricing on the $165 million second-lien term loan C to Libor plus 900 basis points from Libor plus 525 basis points, according to a market source.

Furthermore, the first-lien term loan is now being offered at 99 instead of par and carries call protection of 105 in year one, 103 in year two and 101 in year three.

The second-lien term loan is still being offered at par but is now non-callable for two years with call protection of 102 in year three and 101 in year four.

Although there was always call protection in the deal, the terms were enhanced with these modifications, the source said.

And, with these changes, syndication of "the deal is done," the source added.

Toward the end of August, rumor had it that the first-lien term loan would be flexed up to Libor plus 450 basis points and the second-lien term loan would be flexed up to the mid-to-high 600 basis points context. It was also rumored that both tranches would be offered at 99 and would carry call protection of 105 in year one, 103 in year two and 101 in year three.

The $615 million credit facility also contains a $50 million five-year revolver with an interest rate of Libor plus 300 basis points.

Citigroup is the sole lead bank on the deal.

Currently, AM General is owned by Renco Group Inc., but a new holding company is being formed through a contribution partnership with MacAndrews & Forbes and Renco. Under the partnership, MacAndrews would have a majority stake of the company and Renco would have a minority stake. A portion of the proceeds from this credit facility will go toward the new holding company and portion will go toward debt repayment.

AM General is a South Bend, Ind., military and special purpose vehicles company.

Professional Paint opens above par

Professional Paint's $156 million term loan allocated on Wednesday, and opening levels were basically set at par 3/8 bid, par 7/8 offered, however, there was no trading activity in the name, according to a trader.

The term loan is priced with an interest rate of Libor plus 325 basis points and was offered to investors at par. When the deal first came to market, some investors were skeptical on its ability to get done without a pricing modification because senior leverage was felt to be a little high for the proposed spread. But, as time progressed, the books filled up and the spread remained unchanged.

Senior leverage is just over 3½ times.

The $181 million credit facility also contains a $25 million revolver with an interest rate of Libor plus 325 basis points.

Merrill Lynch Capital is the lead bank on the deal that will be used to help fund Cosorcio Comex's acquisition of Professional Paint from The Jordan Co.

Professional Paint is a Denver-based manufacturer and distributor of architectural paints and coatings.

Denny's closes

Denny's Corp. closed on its $420 million senior secured credit facility consisting of a $225 million five-year term loan (B2/B) with an interest rate of Libor plus 325 basis points, a $75 million four-year revolver (B2/B) with an interest rate of Libor plus 350 basis points and a $120 million six-year second-lien term loan (B3/CCC+) with an interest rate of Libor plus 512.5 basis points.

Originally, the deal was launched with a $200 million first-lien term loan priced at Libor plus 350 basis points and a $100 million second-lien term loan priced at Libor plus 550 basis points but the tranches were upsized and pricing was reduced during the syndication process. Size and pricing of the revolver were left unchanged throughout the syndication process.

Banc of America Securities LLC and UBS Securities LLC were joint lead arrangers on the deal, with Banc of America listed on the left.

Proceeds were used by the Spartanburg, S.C., full-service family restaurant chain to refinance the existing credit facility, refinance a portion of existing senior notes and be available for working capital, capital expenditures and other general corporate purposes.

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