GenCorp firms pricing; Springs Industries reverse flexes; Lake Las Vegas bounces around on technicals

By Sara Rosenberg

New York, Nov. 24 - GenCorp Inc.'s institutional paper will be coming at the low end of price talk because of the large amount of interest that the deal received. Meanwhile, Springs Industries Inc. lowered pricing on its term loan B by 50 basis points.

On the secondary side, Lake Las Vegas Resort's bank debt underwent some pressure during the morning hours trading off by about ¾ of a point before rebounding to previous levels.

GenCorp firmed up pricing on its $25 million six-year term loan B and $75 million six-year credit-linked institutional letter-of-credit facility at Libor plus 300 basis points, compared to original price talk of Libor plus 300 to 325 basis points, according to a fund manager.

The term loan/letter of credit portion of the credit facility filled out rather quickly as existing lenders opted to roll over their positions into the new slightly smaller deal in terms of the amount of institutional paper available.

As of Aug. 31, GenCorp had $28½ million outstanding under its term loan A and $113.6 million outstanding under the original $115 million term loan B. So roll over basically ate up the entire deal, a source previously explained.

The $175 million secured credit facility (B1/BB/BB-) also contains a $75 million five-year revolver with an initial interest rate of Libor plus 275 basis points. Revolver pricing is grid based and can range from Libor plus 225 to 300 basis points depending on leverage.

Allocations are anticipated to take place on Monday, the fund manager added.

GenCorp. is a Rancho Cordova, Calif., technology-based manufacturer of aerospace and defense products and systems.

Springs Industries cuts pricing

Springs Industries was also met with strong investor appetite allowing the syndicate to reverse flex the $290 million six-year term loan B to Libor plus 275 basis points from Libor plus 325 basis points, according to a syndicate document.

Pricing on the $150 million five-year revolver and the $50 million five-year term loan A remained at Libor plus 275 basis points.

JPMorgan and Wachovia are the lead banks on the deal, with JPMorgan left lead.

Proceeds from the $490 million credit facility (Ba3) will be used to refinance existing debt.

Springs Industries is a Fort Mill, S.C., home furnishings manufacturer and marketer.

Lake Las Vegas active

Lake Las Vegas' first-lien term loan was surprisingly active in the morning hours despite the shortened pre-holiday session with the paper trading down to around the par ¼ area on technicals before heading back up to the 101 area to end the day unchanged, according to a trader.

"Dealers were heavy. Looking to get out. And now that the paper has cleared it moved back up," the trader explained.

Lake Las Vegas' $435 million five-year first-lien term loan, which first opened for trading on Oct. 28, is priced with an interest rate of Libor plus 250 basis points.

The issuer is a Henderson, Nev., residential, golf and resort community.

Delta allocations next week

Delta Air Lines Inc. is expecting to allocate its upsized $630 million three-year senior secured credit facility on Monday with closing targeted for Tuesday, according to a market source.

The facility consists of a $300 million revolver with an interest rate of Libor plus 400 basis points and a $330 million term loan - increased from $200 million late last week - with an interest rate of Libor plus 600 basis points.

The revolver is secured by some accounts receivable and the term loan is secured by the remaining unencumbered assets.

Syndication of the deal, which went very well with the tranches previously said to be oversubscribed, was done by approaching a select group of lenders. On the term loan the syndicate basically went out to hedge funds and some people who knew the credit, while on the revolver they just went out to a couple of banks.

General Electric Capital Corp. is the sole lead arranger on Delta's facility.

The Atlanta air transportation company is getting the new deal in connection with its out-of-court restructuring plan.

Texas Genco mulls second-lien

Texas Genco Holdings Inc. is considering reducing its second-lien bond and replacing that with some amount of second-lien term loan debt although no decision has officially been made as of yet, according to a market source.

"It will be a function of demand of the term loan B and the bonds, which launch next week," the source explained, adding that because the decision will be based on the bond launch nothing will be finalized until after that event.

The $1.375 billion seven-year term loan B of which $475 million is delayed draw, however, is known to be at least two times oversubscribed already, the source said. Pricing on the term loan B is currently set at Libor plus 250 basis points.

Meanwhile, the $325 million five-year revolver is also moving along nicely with CIT and GE Capital signing on as co-documentation agents, ABN Amro and Royal Bank of Canada signing on as senior managing agents and NatCity signing on to the lower tier. Pricing on the revolver is set at Libor plus 225 basis points.

Texas Genco's $2.2 billion credit facility (Ba2/BB) also includes a $200 million five-year letter of credit facility with price talk of Libor plus 225 basis points and a $300 million five-year 'special' letter of credit facility with price talk of Libor plus 225 basis points.

Goldman Sachs, Deutsche Bank, Morgan Stanley and Citigroup are lead banks on the deal (excluding the special letter of credit facility), with Goldman listed on the left.

Deutsche is leading the syndication of the $300 million special letter of credit facility and is marketing the tranche to special investors, such as hedge funds and insurance companies, the source explained.

Proceeds from the facility, combined with proceeds from what is currently contemplated as a $1.375 billion bond deal, will be used to help fund GC Power Acquisition LLC's acquisition of Texas Genco from CenterPoint Energy Inc. for approximately $3.65 billion in cash.

GC Power Acquisition LLC is a newly formed entity owned in equal parts by affiliates of The Blackstone Group, Hellman & Friedman LLC, Kohlberg Kravis Roberts & Co. L.P. and Texas Pacific Group.

Texas Genco is a Houston wholesale electric power generating company.

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