Isle of Capri, Hargray set talk; Reliant firms spread; TD Ameritrade dips on merger talk; LCDX softens

By Sara Rosenberg

New York, June 6 - Isle of Capri Casinos Inc. and Hargray Communications Group came out with price talk on their credit facilities as both deals were launched with bank meetings during Wednesday's market hours.

In other primary news, Reliant Energy Inc. finalized pricing on its pre-funded letter-of-credit facility at the tight end of guidance and New World Gaming Partners Ltd.'s credit facility was oversubscribed as the commitment deadline hit.

Meanwhile, in the secondary, TD Ameritrade Holding Corp.'s term loan B headed lower as talk of a potential merger emerged and LCDX weakened in sympathy with equities and high yield.

Isle of Capri held a bank meeting on Wednesday to kick off syndication on its proposed $1.35 billion senior secured credit facility, and in connection with the launch, price talk on the transaction was announced, according to a buyside source.

The $500 million revolver was presented to lenders with initial talk of Libor plus 200 basis points, and the $700 million term loan B and $150 million delayed-draw term loan were both presented with talk of Libor plus 175 bps, the source said.

The delayed-draw term loan has a 50 bps undrawn fee, the source added.

The deal includes a $500 million accordion feature that would allow the company to get $200 million of additional debt at joint venture Isle of Capri Black Hawk LLC and $300 million of additional debt for general purposes.

Credit Suisse is the lead bank on the deal.

Proceeds will be used to refinance the company's existing senior secured credit facility and its outstanding 9% senior subordinated notes due 2012.

Isle of Capri is a St. Louis-based developer, owner and operator of branded gaming facilities and related lodging and entertainment facilities.

Hargray price talk

Hargray Communications also released price talk as it too held a bank meeting during the session to launch its credit facility to investors, according to a market source.

The $25 million revolver (B1/B) and the $195 million first-lien term loan (B1/B) were both launched with talk of Libor plus 225 bps, and the $95 million second-lien term loan (Caa1/CCC+) was launched with talk of Libor plus 500 bps, the source said.

Bank of America and RBC Capital are the joint bookrunners on the $315 million deal.

Proceeds will be used to help fund Quadrangle Capital Partners' acquisition of the company.

Hargray is based in Hilton Head Island, S.C., and provides telecommunication services in southeastern South Carolina and northeastern Georgia.

Reliant finalizes pricing

Reliant Energy firmed up pricing on its $250 million pre-funded letter-of-credit facility due June 2014 at Libor plus 175 bps, the low end of original talk of Libor plus 175 bps to 200 bps, according to a market source.

The company's $750 million credit facility also includes a $500 million revolver due June 2012 that is priced at Libor plus 175 bps, in line with original talk.

Deutsche Bank, Goldman Sachs, JPMorgan, Merrill Lynch, ABN Amro and Bear Stearns are the lead banks on the deal, with Deutsche the administrative agent.

Proceeds from the new facility, along with funds from selling $1.25 billion of senior notes, will be used to repay the company's $400 million term loan and to tender for its combined $1.1 billion of 9¼% and 9½% senior secured notes.

Reliant is a Houston-based provider of electricity and energy services to retail and wholesale customers.

New World Gaming overfills

New World Gaming's first- and second-lien term loans were "comfortably oversubscribed" by Wednesday's commitment deadline, according to a market source.

The C$575 million first-lien term loan B (Ba3/B+) and the C$115 million delayed-draw term loan (Ba3/B+) are being talked at Libor plus 225 bps, and the C$400 million second-lien term loan (Caa1/CCC+) is being talked at Libor plus 500 bps.

The delayed-draw term loan has a 50 bps undrawn fee that increases to 100 bps after six months if utilization is less than 50%,

The second-lien term loan carries call premiums of 102 in year one and 101 in year two.

New World Gaming's C$1.115 billion credit facility also includes a C$25 million revolver (Ba3/B+) that is talked at Libor plus 225 bps, with a 50 bps undrawn fee.

Bear Stearns and Royal Bank of Canada are the lead banks on the deal, with Bear Stearns the left lead and administrative agent.

New World Gaming, a joint venture owned by Publishing and Broadcasting Ltd. and Macquarie Bank Ltd., will use the credit facility to help fund the acquisition of Gateway Casinos Income Fund at a price of C$25.26 per unit in cash and Gateway's 5.35% convertible debentures. New World Gaming will also acquire the assets of Gateway Casinos Inc. These transactions have an aggregate enterprise value of C$1.37 billion.

Gateway Casinos is a Burnaby, B.C., casino operator. The company owns seven casinos in British Columbia and two in Alberta, with two under construction in British Columbia that will replace two existing facilities.

Ameritrade trades down

Moving to the secondary market, TD Ameritrade's term loan B gave up some ground on Wednesday as the company revealed that two hedge funds are pushing it to pursue a merger with one of its industry peers, according to a trader.

The term loan B ended the day at par ¼ bid, par ½ offered, down from previous levels of par 3/8 bid, par 5/8 offered, the trader said.

The company said in an 8-K filed with the Securities and Exchange Commission that funds managed by JANA Partners LLC and by S.A.C. Capital Advisors, LLC have expressed the desire for TD Ameritrade to merge with E*Trade Financial or Charles Schwab to "dramatically increase long-term shareholder value."

The two hedge funds have an aggregate economic interest in approximately 50 million shares of TD Ameritrade, equivalent to 8.4% of the outstanding shares, and each of them are looking to acquire additional shares in excess of $600 million.

In response to these hedge funds, TD Ameritrade said its board of directors continually reviews its business plan and standalone strategy, as well as potential strategic combinations.

"Industry consolidation is an important consideration of the board," TD Ameritrade said in the SEC filing, adding that "it is interested in growing via combination, at the right time and if it can reach agreement for the right strategic fit.

"TD Ameritrade has had and expects to continue to have discussions with its peers in the industry regarding mergers and acquisitions and believes that to be successful they must occur at the right time and be consistent with TD Ameritrade's business strategy," the filing added.

TD Ameritrade is an Omaha, Neb.-based provider of securities brokerage services and technology-based financial services to retail investors and business partners.

LCDX lower

In other secondary news, LCDX ended the session at lower levels primarily because equities were weaker and high yield was a bit softer as well, according to a trader.

The index went out at 100.53 bid, 100.55 offered, down from 100.58 bid, 100.60 offered at the close of business Tuesday, the trader said.

"Market sentiment softened up a bit so people are starting to push this thing lower," the trader said.

Forest Oil closes

Forest Oil Corp. closed on its $1 billion amended and restated revolving credit facility due June 6, 2012, according to a company news release.

Commitments for the revolver consist of a U.S. facility of up to $850 million and a Canadian facility of up to $150 million.

The initial borrowing base is $1.4 billion.

JPMorgan acted as the lead bank on the deal.

The amendment and restatement was done in connection with the company's acquisition of the Houston Exploration Co. for approximately $750 million in cash and roughly 24 million shares.

Forest is a Denver-based acquirer, explorer, developer and producer of natural gas and crude oil. Houston Exploration is a Houston-based natural gas and crude oil producer.

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