Nextel giant term loan expected to get high demand as existing lenders will probably rollover commitments

By Sara Rosenberg

New York, Nov. 24 - Nextel Communications Inc.'s repricing, which launched via a conference call on Monday, was expected to move along rather smoothly by many market participants mainly do to anticipated rollover by existing investors.

"It's one of the largest institutional pieces," a market source said. "I'm sure it's going to be a complete rollover."

The Reston, Va., wireless communications company launched a term loan of up to $2.2 billion via JPMorgan to refinance/reprice the company's existing term loan B, C and D. The new tranche is priced with an interest rate of Libor plus 225 basis points.

The syndicate was not immediately available for comment on the progress of the deal.

Meanwhile, the bank meeting for IMS Meters Holdings Inc.'s $340 million credit facility is now set to take place Tuesday morning, according to a source close to the deal. Previously, a syndicate document had the meeting scheduled for Monday.

The facility consists of a $75 million revolver and a $265 million term loan B. The institutional tranche is split into two parts consisting of a $235 million U.S. term loan and a $30 million European borrower term loan, according to the source.

Price talk, which was previously unavailable, is currently Libor plus 300 basis points on the revolver and Libor plus 300 to 325 basis points on the term loan, the source added.

Credit Suisse First Boston and Goldman Sachs are the joint lead arrangers on the deal.

Proceeds, combined with proceeds from a subordinated debt offering and equity capital provided by the Resolute Fund LP, will be used to help support the leveraged buyout of Invensys plc metering business.

Under the acquisition agreement, IMS will acquire the metering business for a gross cash consideration of $650 million. The transaction is expected to be completed by year end.

IMS, a manufacturer and seller of water, gas, electric and heat metering and communication solutions for the utility industry, is sponsored by The Resolute Fund LP, which is a private equity fund managed by The Jordan Co. LP. The metering business being acquired is a Raleigh, N.C., provider of advanced metering and communications solutions for the worldwide utility industry.

General Cable Corp. closed on its $240 million five-year asset-based revolver (B1/BB), which was part of a $670 million refinancing plan that also included a public offering of common stock, private placements of redeemable convertible preferred stock and seven-year senior unsecured notes, according to a company news release.

UBS Securities and Merrill Lynch Capital acted as joint lead arrangers on the revolver, which carries an interest rate of Libor plus 275 basis points.

At closing, the company had about $92 million drawn in revolving loans and about $37 million in letters of credit issued thereunder, according to the release.

As part of the refinancing, General Cable raised $41.4 million through the sale of 5.05 million shares of common stock at $8.20 per share and $103.5 million through the sale of 2.07 million shares of redeemable convertible preferred stock at $50.00 per share. Furthermore, the company issued $285 million of senior unsecured notes.

Proceeds from the refinancing were used to prepay all amounts outstanding under the former senior secured revolver, senior secured term loans and accounts receivable asset-backed securitization facility and to pay fees and expenses.

"We are very pleased with the increased financial flexibility our refinancing provides us," said Christopher Virgulak, executive vice president, chief financial officer and treasurer, in the release. "Our new capital structure substantially increases our liquidity while also extending our debt maturities and improving our interest coverage and debt-to-capital ratio.

"As a result of the refinancing, the company is well positioned for the long term and is now able to take advantage of both organic and strategic growth opportunities as they present themselves."

General Cable is a Highland Heights, Ky., wire and cable manufacturer.

NUI Corp. closed on its $405 million credit facility (split between the holding company and the operating company) on Monday, according to a syndicate source.

The Bedminster, N.J., diversified energy company's facility contains a $255 million term loan (B3) at the holding company level with an interest rate of Libor plus 600 basis points. Of the $255 million, about $85 million will be downstreamed as a capital contribution to NUI Utilities to repay an intercompany receivable between NUI Corp. and NUI Utilities, according to a company news release.

At the operating company level (Ba3), NUI Utilities obtained a $50 million revolver, a $50 million term loan and a $50 million delay draw term loan, all priced with an interest rate of Libor plus 500 basis points. The delay draw term loan can be used solely for the purpose of paying down NUI Utilities' medium-term notes due February 2005, according to the release.

On Nov. 14, the $255 million term loan had been reverse flexed to Libor plus 562.5 basis points and the $150 million of operating company debt had been reverse flexed to Libor plus 475 basis points. However, all of the tranches were moved back to their original pricing following last week's news of an attorney general subpoena, a source said.

More specifically, on Nov. 19, the company revealed that in connection with the focused audit of NUI Corp. and NUI Utilities Inc., initiated by the New Jersey Board of Public Utilities in March 2003, some questionable transactions within NUI Energy Brokers, the company's wholesale energy trading subsidiary, were identified. Furthermore, subpoenas were issued by the New Jersey State Attorney General's Office in connection with these transactions.

There is an undrawn commitment fee of 62.5 basis points on the revolver and the delayed draw term loan. There is also a one-time draw down fee of 50 basis points on the delayed draw term loan, which the company has a year to use.

All four tranches have a Libor floor of 2% and a lifespan of 364 days. However, the tenor of all the tranches can be extended by six months for a fee of 50 basis points and then for another six months for an additional 50 basis points fee.

Credit Suisse First Boston is the sole lead on the refinancing deal, which will address maturities during 2004 and provide financial flexibility and liquidity while the sale of NUI is pursued.

"We believe that the closing of these credit facilities provides the company with the financial flexibility and necessary support to continue the sales process," stated Mark Abramovic, president, in the company news release. "The proceeds will be used to strengthen our balance sheet and support our distribution systems during the winter heating season and beyond."

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