Charter trims spread; NPC tweaks deal; W&T sets talk; Lear breaks; GM dips; Movie Gallery rises

By Sara Rosenberg

New York, April 24 - On the primary side, Charter Communications Inc. lowered pricing on its institutional term loan on Monday, NPC International Inc. upsized its term loan B, while at the same time reducing pricing on the tranche, and W&T Offshore Inc. opted to release price talk on its term loan B even though the transaction has so far only publicly received one of two ratings.

Switching to the secondary, Lear Corp.'s term loan B freed for trading late in the day, General Motors Corp.'s revolver was tugged lower on the bid side and Movie Gallery Inc.'s term loan B felt stronger with levels tightening up.

Charter Communications reverse flexed pricing on its $5 billion term loan due 2013 during Monday's market hours and added 101 soft call protection for one year to the tranche, according to a market source.

The term loan now carries an interest rate of Libor plus 262.5 basis points, as compared to original price talk at launch of Libor plus 275 basis points, the source added.

J.P. Morgan Securities Inc., Banc of America Securities LLC and Citigroup Global Markets Inc. are the lead banks on the deal.

Charter's $5.3 billion credit facility (B2/B) also includes a $300 million revolver tranche.

Proceeds will be used to refinance the existing senior secured credit facility held by Charter Communications Operating LLC.

In connection with this transaction, the St. Louis-based broadband communications company is amending its existing $1.5 billion revolver.

NPC upsizes, cuts spread

Also hopping aboard the reverse flex train Monday was NPC International, as the company lowered pricing on its term loan B tranche by 50 basis points during the session, according to a market source.

That wasn't the only change announced; the company also increased the size of its term loan B as the decision was made to reduce the size of its proposed bond offering.

The term loan B now carries pricing of Libor plus 175 basis points, down from original price talk at launch of Libor plus 225 basis points, the source said.

In addition, the size of the term loan B tranche was increased to $300 million from $275 million as the company's bond offering was downsized to $175 million from $200 million, the source added.

NPC's now $375 million (up from $350 million) credit facility (B1/B+) also contains a $75 million revolver that was left unchanged in terms of size and pricing. The initial spread on the revolver is set at Libor plus 225 basis points.

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

Proceeds from the credit facility, along with bond proceeds and $163 million of sponsor equity, will be used to finance Merrill Lynch Global Private Equity's acquisition of the company.

NPC is a Lenexa, Kan., franchisee of Pizza Hut restaurants.

W&T term B talk

W&T Offshore went out to potential lenders with price talk on its $300 million term loan B during Monday's market hours, choosing not to wait for a rating from Moody's Investors Service before doing so, as was originally planned, according to a market source.

The term loan B, which already received a B+ rating from Standard & Poor's this past Friday, is being talked at Libor plus 225 to 250 basis points, the source said.

TD Securities and Lehman Brothers are the lead banks on the deal, with TD the left lead.

The term loan B was launched to investors through a general syndication bank meeting on Wednesday.

W&T Offshore's $1.3 billion senior secured credit facility also includes a $500 million revolver (B+) and a $500 million term loan A (B+).

A meeting for existing bank lenders only already took place on Feb. 16 during which the pro rata portion of the deal was presented to the group, resulting in that portion of the deal being fully syndicated at this point.

The revolver and term loan A are priced with an interest rate of Libor plus 275 basis points for the first six months after close, dropping to Libor plus 250 basis points thereafter. Once the term loan A has been repaid, pricing on the pro rata will be flipped into a pricing grid that can range from Libor plus 125 to 187.5 basis points based on utilization.

Proceeds from the credit facility will be used to help fund the acquisition of substantially all of the Gulf of Mexico conventional shelf properties of Kerr-McGee Oil & Gas Corp. Base merger consideration for the transaction is about $1.3 billion in cash.

The transaction is expected to close during the second quarter, subject to regulatory review and customary closing adjustments and conditions.

W&T Offshore is a Houston-based oil and natural gas company.

Lear frees to trade

Moving to the secondary, Lear's $1 billion first-lien term loan B (B2/B+) started trading late in the day on Monday, with levels seen as high as 101 bid, 101¼ offered before settling in at par ½ bid, par 7/8 offered, where they closed the session, according to a trader.

The term loan B is priced with an interest rate of Libor plus 250 basis points.

Originally, Lear came to market in early April with a $600 million first-lien term loan B talked at Libor plus 300 basis points and a $200 million second-lien term loan (B3/B-) talked at Libor plus the 450 to 475 basis points.

However, during syndication, the second-lien loan was removed from the capital structure and the first-lien loan was upsized by $400 million - giving the company $200 million of additional liquidity.

Also during syndication, the first-lien term loan B was reverse flexed on two occasions, first to Libor plus 275 basis points from Libor plus 300 basis points and then to Libor plus 250 basis points.

JPMorgan Chase Bank, Bank of America, Citibank and Deutsche Bank are the lead banks on the deal.

Proceeds from the new term loan will be used to refinance the company's $400 million term loan scheduled to mature in February 2007, to fund the retirement of the company's outstanding convertible senior notes and for general corporate purposes.

In connection with the new term loan B, Lear's primary credit facility is being amended and restated to, among other things, provide additional collateral for both the company's existing revolver and the new term loan, increase the revolver's interest rate to Libor plus 225 basis points and provide additional flexibility under existing financial covenants through 2007.

Lear is a Southfield, Mich., supplier of automotive interior systems and components.

GM languishes in trading

GM's revolver dropped off on the bid side by about three quarters to a full point from where it was trading on Friday, primarily as a result of market technicals, according to a trader.

The Detroit-based automotive company's revolver closed the session quoted at 94¼ bid, 95½ offered, the trader said.

For a while there has been speculation that GM might be refinancing its revolver since there is some doubt as to whether lenders would allow any borrowings under the facility due to the restatement of prior financial statements - which pushed trading levels on the revolver into the high-90's.

However, talk has now turned to the possibility that the company may only seek an amendment to correct the problem as opposed to doing an all out refinancing, leaving lenders less hopeful of a near-term paydown.

Movie Gallery inches up

Movie Gallery's term loan B was stronger on the bid side as some positive sentiment still remained from last week's restructured lease and covenant compliance announcements, according to a trader.

The term loan B closed the day quoted at 90¾ bid, 91½ offered, up from Friday's wider levels of 90 bid, 91½ offered, the trader said. On Friday, a different trader had the paper closing the week at 90½ bid, 92½ offered, still making Monday's levels higher on the bid side and tighter overall.

Last week, the Dothan, Ala.-based movie rental company came out with a couple of good news items - a management agreement entered into with Hilco Real Estate LLC and anticipations of loan covenant compliance.

Under the management agreement with Hilco, a program will be initiated to restructure leases at more than 1,100 existing Movie Gallery and Hollywood Video stores.

As for the credit facility item, the company said that based on preliminary results for first quarter, it expects to be in full compliance with the financial covenants for the reporting period ended April 2.

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