Solo Cup, TransWestern Publishing break; Goodyear heavy in second day of trading

By Sara Rosenberg

New York, Feb. 19 - A lot of attention was focused on new primary deals breaking in the secondary on Thursday, such as Solo Cup Co. and TransWestern Publishing Co. LLC. And, The Goodyear Tire & Rubber Co.'s asset-based add-on continued to spark interest on its second day in the trading market as a slight heaviness was felt to be surrounding the paper.

Solo Cup's $800 million credit facility (B1/B+) allocated and began trading in the secondary market on Thursday afternoon with levels on the term loan B seen strengthening throughout the day.

"The bid on the break was 101.25 and the offer was 101.5. It has since moved up to a bid of 101.375 and is being offered at 101.625," a fund manager said.

The $650 million term loan B is priced with an interest rate of Libor plus 250 basis points. Originally, the tranche was talked in the Libor plus 275 basis points area but was reverse flexed due to incredibly strong investor demand. In fact, within two days of launching, the B loan was said to have received about $700 million in commitments and within five days of launching there was about $1.5 billion in commitments on the books.

"Allocations were pretty small for most lenders," the fund manager added.

Solo's facility also contains a $150 million revolver with an interest rate of Libor plus 275 basis points.

Bank of America is the lead bank on the deal.

Proceeds, combined with proceeds from a $325 million high-yield bond offering, will be used to help fund the previously announced acquisition of SF Holdings Group Inc. (Sweetheart Cup, Hoffmaster Tissue and The Fonda Brands).

Also as part of the transaction, Vestar Capital Partners is making a substantial minority equity investment in Solo.

Solo Cup is based in Highland Park, Ill., and SF Holdings is based in Owings Mills, Md. Both companies are manufacturers and distributors of disposable foodservice and beverage-related products.

TransWestern Publishing's $665 million credit facility also broke for trading on Thursday with the first lien term loan quoted at par ¾ bid, 101 offered, according to a trader.

The $400 million first lien term loan (B1/BB-) ended up pricing at the lower end of price talk at Libor plus 225 basis points.

Besides the first lien term loan, the facility contains a $200 million second lien term loan (B2/B) that also priced at the low end of price talk at Libor plus 375 basis points and a $65 million revolver (B1/BB-).

Both the first and the second lien term loans were well oversubscribed on the day of their launch.

Goldman Sachs and Wachovia are joint lead arrangers on the deal, with Goldman listed on the left.

Proceeds will be used by the San Diego telephone directory publisher to finance the tender offer of its $215 million series F 9 5/8% senior subordinated notes, refinance the existing credit facility and help pay a dividend to equity investors.

Goodyear's $650 million add-on to its existing $1.3 billion asset-based credit facility was quoted at 99½ bid, par ½ offered on Thursday, although the paper was not seen trading below par at any point during the day, according to a trader.

"Goodyear broke yesterday. That's been very heavy. It seems like there were better sellers out there. It's a safe credit. It's asset-based. [But it] felt like their might have been a couple of large accounts that had too much exposure. It traded in the par 5/8, par 7/8 context yesterday. Today it was trading more around par 3/8," the trader said.

The $650 million add-on, which was increased from $300 million during syndication, is priced with an interest rate of Libor plus 450 basis points.

JPMorgan and Citigroup are the lead banks on the Akron, Ohio, tire company's deal.

Proceeds will be used to partially repay the company's existing U.S. term loan, to repay other debt and for general corporate purposes.

Nextel firmer bid

Nextel Communications Inc. "felt a little bit stronger" on Thursday following the release of earnings numbers with the term loan A quoted at par ¼ plus bid, par 3/8 plus offered, the term loan E quoted at par 7/8 bid, 101½ offered and the revolver quoted at 98¾ bid, 99¼ offered, according to a trader.

"Right out of the gate the bonds were up three or four points so that helped firm up the bid side on the bank debt," the trader explained.

On Thursday, the Reston, Va., wireless company announced full-year 2003 results that included income available to common stockholders of $1.47 billion, or $1.41 per share, revenue of $10.8 billion, a 24% increase over 2002, operating income before depreciation and amortization of $4.2 billion, an increase of 35% over the prior year and free cash flow of $1.3 billion, compared to $122 million for 2002.

For the fourth quarter revenue was $3 billion and income was $637 million, or $0.58 per share, according to a company news release.

Guidance for 2004 included $4.9 billion or more in operating income before depreciation and amortization, $1.6 billion or more in free cash flow and $2.00 or more in earnings per share.

Charter slightly softer

Charter Communications Inc.'s bank debt was a touch softer with the term loan A quoted at 96¾ bid, 97¼ offered and the term loan B quoted at 97¾ bid, 98¼ offered.

However, according to one trader, the activity and the little dip had nothing to do with the company's release of earnings results. "People didn't really pay attention to earnings. They've been buying on market technicals not news," the trader explained.

The St. Louis cable company reported fourth quarter results that included income from operations of $138 million, compared to $43 million in the same period last year, revenues of $1.217 billion, up 2% from the fourth quarter of 2002, adjusted EBITDA of $484 million, up 6% from last year's fourth quarter.

For the full year, revenues increased 6% to $4.819 billion, adjusted EBITDA grew 7% to $1.927 billion, operating costs and expenses rose $122 million, or 4%, income from operations increased by $4.838 billion to $516 million, net loss applicable to common stock declined to $242 million from $2.517 billion and net loss per common share declined to $0.82 from $8.55.

"2003 was a year of transition as we reorganized our operations, made significant changes in our management team, and completed call center consolidations and billing conversions. Even in this transition year, we accomplished much, which we believe positions the company to improve sales, customer satisfaction and operating performance in 2004. We made significant progress in improving our financial position and we continue to evaluate opportunities to reduce intermediate term debt maturities and leverage," said Carl Vogel, president and chief executive officer, in a company news release.

Hillman expected mid-March

The Hillman Cos. Inc.'s proposed credit facility to help support its buyout by an affiliate of Code Hennessy & Simmons LLC from Allied Capital Corp. is expected not to hit the market until at least mid-March, a source close to the deal revealed.

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

The source declined to comment on size or structure of the facility saying that nothing has been made public at this time.

However, previously a market source told Prospect News that the credit facility is anticipated to be sized somewhere around $250 million to $260 million. The source declined to confirm or deny this information.

The definitive buyout agreement places a total transaction value of about $510 million for the sale of Hillman, including repayment of outstanding debt and adding the value of the company's outstanding trust preferred shares, according to an Allied Capital news release.

Allied Capital expects to be repaid its $44 million in outstanding mezzanine debt, but also expects to provide up to $47.5 million in new mezzanine financing to Hillman in conjunction with the transaction.

Hillman is a Cincinnati manufacturer of key-making equipment and distributor of key blanks, fasteners, signage, and other small hardware components.

Playtex closes

Playtex Products Inc. closed on its $150 million senior secured revolving credit facility (B1) that was used to repay and/or terminate commitments under its existing credit facility, terminate its existing accounts receivables facility and pay transaction fees and expenses, according to an 8-K filed with the Securities and Exchange Commission on Thursday.

Playtex is a Westport, Conn., manufacturer and distributor of personal care and consumer products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.