Vanguard Car, Alon USA float talk; Simmons outlines repricing; Del Monte breaks; Movie Gallery dips

By Sara Rosenberg

New York, May 10 - Vanguard Car Rental USA Inc. came out with early price talk on its credit facility as the deal is gearing up to launch with a Friday bank meeting, Alon USA Energy Inc. released speculative price talk on its term loan based on assumed ratings and Simmons Bedding Co. revealed just what type of spread cut it is looking for under its repricing proposal as a lender call was held during market hours.

Meanwhile, in the secondary, Del Monte Corp.'s term loan B add-on freed up for trading atop par and Movie Gallery Inc.'s term loan B softened a touch as some sellers surfaced likely just looking for profit.

Vanguard Car Rental started floating around some price talk on its institutional bank debt as the deal is getting ready to officially kick off its general syndication process on Friday, according to a market source.

The $800 million seven-year term loan B is currently being talked at Libor plus 225 basis points to Libor plus 250 basis points, the source said.

Vanguard Car Rental's $975 million credit facility also contains a $175 million six-year revolver.

On Wednesday, Standard & Poor's assigned a BB rating to the proposed credit facility, with a recovery rating of 1 and a stable outlook.

"The ratings on Vanguard Car Rental USA Holdings Inc. reflect its weak financial profile and very aggressive financial policy, even after a proposed recapitalization of the company," said S&P credit analyst Betsy Snyder, in the rating release. "However, the company's business risk profile does benefit from its significant presence in the North American on-airport car rental market."

The proposed recapitalization will include refinancing existing debt, paying a small dividend and enhancing liquidity.

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

In the summer of 2005, Vanguard had come to market with credit facility consisting of a $175 million revolver and a $725 million term loan that was going to be used to refinance existing indebtedness as well as to fund a distribution to shareholders.

However, that deal was pulled in August 2005 after being completely reworked to include a $100 million second-lien term loan talked at Libor plus 750 basis points, a downsized $525 million first-lien term loan that saw price talk get as high as Libor plus 500 basis points and the $175 million revolver.

Lehman, Goldman Sachs and Citigroup were acting as the bookrunners on the 2005 deal, with Lehman left lead.

The new deal is said to be very different in terms of sources and uses, as it is not predominantly a dividend deal.

Vanguard is the Tulsa, Okla., owner and operator of Alamo Rent A Car and National Car Rental.

Alon USA spread guidance

Alon USA came out with price talk of Libor plus 225 basis points on its proposed $450 million seven-year senior secured term loan, but that spread is solely based on assumed ratings of B1/B+, according to a market source.

Credit Suisse is the lead bank on the deal that was launched with a conference call on Wednesday at 12:30 p.m. ET.

Proceeds from the term loan will be used to help fund the acquisitions of Paramount Petroleum Corp. and Edgington Oil Co.

Under the Paramount acquisition agreement, Alon USA will pay $307 million for all equity interests in Paramount and assume approximately $100 million of debt, net of cash.

Under the Edgington acquisition agreement, Alon USA will pay approximately $52 million in cash plus an amount to be determined for the value of inventory.

Both transactions are targeted for a late-May close, following regulatory approvals.

Leverage on a net basis is expected to be in the range of 50%.

Alon USA is a Dallas-based independent refiner and marketer of petroleum products. Paramount Petroleum is a Paramount, Calif.-based manufacturer, producer and distributor of asphalt products. Edgington is a Long Beach, Calif.-based heavy crude refining company.

Simmons sets repricing

In other primary happenings, information on Simmons Bedding's term loan C repricing request emerged as the company held a lender call during the session to present the proposal, according to a market source.

Under the repricing, the company is looking to reduce the interest rate on its term loan C to Libor plus 225 basis points from current pricing of Libor plus 250 basis points, the source said.

And, as was previously reported, the company is also looking to upsize the term loan C to refinance its existing senior unsecured term loan.

Goldman Sachs is the lead bank on the deal.

Simmons is an Atlanta-based manufacturer of mattresses.

Del Monte frees to trade

In secondary news, Del Monte's $925 million term loan B add-on (Ba3/BB) broke for trading, with levels initially seen at par 3/8 bid, par 5/8 offered before moving up to par ½ bid, par ¾ offered where they closed out the session, according to traders.

The term loan B add-on, of which $850 million is funded and $75 million is delayed draw through Dec. 31, is priced with an interest rate of Libor plus 150 basis points.

Bank of America, Goldman Sachs and Lehman Brothers are the lead banks on the deal.

Proceeds will be used to fund the acquisition of certain pet product assets, including the Milk-Bone dog snack brand, from Kraft Foods Global Inc. for approximately $580 million, and to help fund the acquisition of cat food maker Meow Mix from The Cypress Group for approximately $705 million.

Following the acquisitions, Del Monte's debt to EBITDA is expected to be around 4x in fiscal 2007.

However, assuming that most post-acquisition cash flow will be used to pay down debt, debt to EBITDA is expected to return to the 2x to 3x area within three years.

Del Monte is a San Francisco-based producer, distributor and marketer of branded and private label food and pet products.

Movie Gallery slips

Movie Gallery's term loan B felt a touch weaker during Wednesday's market hours, with some simply attributing the softening to "profit taking", according to traders.

The term loan B closed out the session quoted at 94¼ bid, 95¼ offered, down from previous levels of 94½ bid, 96 offered, traders said.

The paper had seen a small run up late last week and early this week as investors were taking a very optimistic attitude towards what they might hear when the company releases its first quarter financial results on Thursday.

Last Friday, the term loan B had gained half a point with levels of 93½ bid, 95 offered and then on Monday it gained a full point with levels of 94½ bid, 96 offered, where it remained throughout Tuesday's session.

Movie Gallery is a Dothan, Ala.-based movie rental company.

iPayment closes

iPayment Holdings Inc. completed its public-to-private transaction, under which Gregory S. Daily, iPayment's chairman and chief executive officer, and Carl A. Grimstad, iPayment's president, purchased the company from stockholders at a price of $43.50 per share in cash.

To help fund the transaction, iPayment got a new $575 million senior secured credit facility (B2/B) consisting of a $515 million seven-year term loan with an interest rate of Libor plus 225 basis points and a $60 million six-year revolver with a 50 basis point commitment fee.

During syndication, the term loan was upsized from $450 million as the company's bond offering was downsized to $205 million from $280 million, and pricing was reverse flexed from Libor plus 250 basis points.

Bank of America acted as sole lead arranger and sole bookrunner on the deal.

iPayment is a Nashville, Tenn., provider of credit and debit card-based payment processing services.

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