UPC may upsize term H to $1.6 billion, cuts pricing; Venetian, Ntelos B loans break in 101s

By Sara Rosenberg

New York, Feb. 17 - UPC Financing Partnership reworked its term loan H, giving it the ability to upsize by an additional $1 billion, lowering pricing and changing covenants. Meanwhile, in the secondary, Las Vegas Sands Inc./Venetian Casino Resort LLC and Ntelos Inc. freed up for trading, with their term loan B's quoted in the 101 context.

UPC Financing's $600 million seven-year term loan H now contains the option to be increased to $1.6 billion - split between a maximum $1.1 billion U.S. dollar tranche and a $500 million U.S. dollar equivalent euro tranche that will be marketed to U.S. investors - with the final size expected to be determined by how the book ultimately fills up, according to a market source.

Furthermore, pricing on the term loan H was reverse flexed to Libor plus 275 basis points (rate locked in for six months) with a step down to Libor plus 250 basis points when leverage falls below 4x. Initially the tranche was launched with pricing of Libor plus 300 basis points with a step down to Libor plus 275 basis points when leverage falls below 4x.

The term loan H will no longer have a call protection provision. Originally, the deal was launched with soft call protection of 101 for year one.

Lastly, the permitted acquisition basket is being eliminated from the credit agreement, but senior leverage pro forma for acquisitions must be less than the prevailing covenant or 4x, the source said. Leverage needs to be inside of 4x by March 2006.

Additional proceeds raised from the potential upsizing of the term loan H will be used to repay a majority of the company's outstanding term loan E debt, which carries an interest rate of Libor plus 300 basis points and matures in 2009.

The company will also cancel €167 million from its existing revolving credit facility and put a new €500 million undrawn revolver in place.

Commitments are due by noon on Friday. The term loan H is being offered to investors at par.

"From the first looks of it, it seems like it will happen," the source said about the term loan being upsized to its full $1.6 billion potential. "Guys are recommitting. Market is extremely hot. [And, they] got like $2.5 billion for the H prior to these changes."

UPC Financing is a subsidiary of Denver-based broadband network business UnitedGlobalCom Inc.

UnitedGlobalCom's European broadband subsidiary, UPC Distribution Holdings BV, is also working a new deal, as it is in-market with a new €850 million term loan G with an interest rate of Libor plus 250 basis points. The euro tranche does not contain a call protection provision but is being offered with upfront fees of 75 basis points for commitments of up to $35 million, 100 basis points for commitments of $36 million to $50 million in size, 125 basis points for commitments of $51 million to $70 million in size and 150 basis points for any commitments larger than $70 million.

Proceeds from the two term loans - excluding the additional term loan H debt being contemplated - will be used to refinance the company's existing term loan B and the existing term loan C, which carry an interest rate of Libor plus 550 basis points.

The euro term loan G was launched in January to new and existing banks. However, rollover commitments from lenders who hold positions in the company's euro-denominated term loan B that is being refinanced was expected to, and in fact did, account for basically all of the oversubscribed deal - which has about $1.5 billion in commitments in the book.

Bank of America, Royal Bank of Scotland and ABN Amro are the lead banks on both term loans.

UPC's $525 million term loan F that was recently obtained via TD Securities Inc. and BNP Paribas will remain in place and keep its current pricing of Libor plus 350 basis points, for now. However, after June, the pricing can step down to Libor plus 300 basis points if leverage gets below 4x.

GenTek cuts second-lien pricing

GenTek Inc. reverse flexed pricing on its $135 million second-lien term loan (B-) to Libor plus 600 basis points from Libor plus 700 basis points as the tranche was somewhere in the range of five to six times oversubscribed, according to a market source.

Pricing on the $60 million revolver (B+) and $200 million first-lien term loan (B+) is expected to come at Libor plus 300 basis points, the low end of initial price talk that was set at Libor plus 300 to 325 basis points.

"I think they're going to leave it at L+300. I don't think they're going to try to reverse flex it even though it's two to three times oversubscribed," the source said.

Goldman Sachs Credit Partners LP and Banc of America Securities LLC are joint lead arrangers on the deal.

Proceeds will be used to fund a special dividend to shareholders of about $320 million.

GenTek is a Parsippany, N.J., manufacturer of industrial components and performance chemicals.

Venetian at upper 101s

Las Vegas Sands Inc./Venetian Casino Resort LLC allocated its $1.57 billion amended and restated senior secured credit facility (B1/BB-) on Thursday and saw its $1.17 billion term loan B due June 15, 2011 move up to 101½ bid, 102 offered by evening from late day opening levels that were around 101¼ bid, 101 5/8 offered, according to a trader.

The term loan B, of which $105 million is delayed draw until Aug. 20 with a 75 basis point commitment fee, is priced with an interest rate of Libor plus 175 basis points.

The facility also contains a $400 million revolver due March 2010 with an interest rate of Libor plus 175 basis points and a 50 basis point commitment fee.

Essentially through this deal, the company is increasing its term loan by $400 million, expanding its revolver by $275 million, extending the revolver maturity from Aug. 20, 2009, lowering its interest costs and revising some of its covenants to provide greater operational flexibility.

Currently, the company's existing term loan B and revolver carry an interest rate of Libor plus 250 basis points, so this new deal would lower rates by 75 basis points across the board.

Goldman Sachs and The Bank of Nova Scotia are the lead banks on the deal, with Goldman the left lead.

The company's existing $115 million delayed-draw term loan A is expected to be terminated in connection with the amendment and restatement.

Proceeds from the additional term loan debt, along with proceeds from a $250 million senior notes offering, will be used to retire the outstanding 11% mortgage notes due 2010 of Las Vegas Sands Inc. and Venetian Casino Resort.

Proceeds from the remainder of the amended and restated facility will be used to refinance borrowings under the existing senior secured credit facility, to finance a portion of the design, development, construction and pre-opening costs of the Palazzo Casino Resort, and for general corporate purposes.

Las Vegas Sands is a Las Vegas hotel, gaming, resort and exhibition/convention company.

Ntelos breaks

Ntelos also allocated its credit facility on Thursday, with its first-lien term loan B quoted at 101 3/8 bid, 101 7/8 offered by evening and its second-lien term loan quoted at 102¼ bid, 102¾ offered, according to a trader.

The $400 million first-lien term loan (B2) is priced at Libor plus 250 basis points with a step down to Libor plus 225 basis points if leverage falls below 4x. The tranche was reverse flexed from Libor plus 275 basis points during syndication.

The $225 million second-lien term loan (B3) is priced at Libor plus 500 basis points. This tranche was reverse flexed from Libor plus 550 basis points during syndication.

Both term loan tranches were originally issued to investors at par.

Ntelos' $660 million senior secured credit facility also contains a $35 million revolver (B2) with an initial interest rate of Libor plus 250 basis points, after reverse flexing from Libor plus 275 basis points during syndication.

Morgan Stanley Senior Funding Inc. and Bear Stearns & Co. Inc. are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley the left lead and administrative agent.

Proceeds will be used to help in the recapitalization and sale of the company to affiliates of Quadrangle Capital Partners LP and Citigroup Venture Capital.

In the first step of the transaction, Ntelos will refinance its existing debt and repurchase up to 75% of its existing equity in a self-tender offer at a price of $40 per common share.

Following that step, Quadrangle and CVC will purchase up to 24.9% of the post-recapitalization equity of the company, also at a price of $40 per share.

And, after receipt of regulatory approvals, Quadrangle and CVC will acquire the remainder of the company's equity, at the same $40 per share price, in a merger transaction.

The closings of the refinancing and initial stock repurchase by the company are not conditioned on the sale of any equity to Quadrangle and CVC.

Ntelos is a Waynesboro, Va., regional integrated communications provider.

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