Hayes second lien slides lower in first trading session; Datatel book may close early; Alliance One upsizes

By Sara Rosenberg

New York, April 11 - Hayes Lemmerz International Inc. allocated its new $150 million five-year second-lien term loan (B2/B) and repriced $450 million term loan B on Monday morning, with the second lien freeing up for trading in the low-101s but later heading down to the low-pars, and the repriced term B quoted in the upper-pars steadily throughout the session.

Meanwhile, Datatel Inc.'s recently launched credit facility has already received so much interest that there's talk of possibly shutting the book down ahead of schedule. And, Alliance One International Inc. officially increased the size of its term loan A by $50 million, with pricing left unchanged.

Hayes Lemmerz's second-lien term loan opened for trading at 101 bid, 101½ offered on Monday morning, according to a market source, but proceeded to head lower throughout trading.

Around mid-afternoon, one trader saw the paper quoted at 99½ bid, par ½ offered.

By the end of the day, a different trader saw the paper at par bid, par ½ offered. This trader said he never saw the bid go as low as 99½ on his desk but remarked that there could have been other desks quoting it that low at one point.

"It's got to be all technicals. I haven't seen any news out there. There must have been a lot of flippers and not a lot of buyers," the first trader said in explanation of the progressive weakening.

Meanwhile, Hayes' repriced term loan B was quoted at par ½ bid, 101 offered steadily throughout the day - basically unchanged from where the term loan B was trading prior to the amendment, the second trader pointed out.

The second-lien term loan is priced with an interest rate of Libor plus 550 basis points, and the term loan B was repriced at Libor plus 325 basis points from Libor plus 375 basis points.

Originally, the company planned on doing a €120 million offering of senior unsecured notes with half the proceeds earmarked for the repayment of some term loan B debt and half earmarked for general corporate purposes - with the repayment acting as the basis behind the planned repricing.

But, the notes offering was withdrawn so Hayes decided to replace the deal with a new $150 million second-lien term loan so that the term loan B repayment could still be made and the repricing amendment request could proceed.

Also as part of the amendment, the company changed some financial covenants and gained permission to use about 50% of the net proceeds from the proposed divestiture of its Commercial Highway Hub and Drum business for capital expenditures.

Citigroup acted as the lead bank on the deal.

"We are extremely pleased with the continued show of support from our existing lenders and the commitment of our new investors. The new financing arrangements significantly enhance the company's liquidity, provide greater flexibility and enable us to continue our strategic investments in geographic and product areas that have greater investment return and cash flow generation potential," said James Yost, vice president of finance and chief financial officer, in a new release announcing the completion of the deal.

Hayes Lemmerz is a Northville, Mich., supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components.

Datatel oversubscribed

Datatel's $90 million first-lien term loan (Ba3/B+) and $30 million second-lien term loan (B2/B-) were already oversubscribed by Monday - only a few days after the Thursday bank meeting that launched the deal into syndication - leaving some with the impression that the book may be shut down ahead of next week's commitment deadline, according to a market source.

The six-year first-lien term loan is talked at Libor plus 275 basis points, and the 61/2-year second-lien term loan is talked at Libor plus 575 basis points. Both tranches are being offered to investors at par.

As of Monday afternoon, there were already more than 15 accounts in the book, the source added.

Datatel's $155 million credit facility also contains a $35 million five-year revolver (Ba3/B+) talked at Libor plus 275 basis points that is being offered with an upfront fee of 50 basis points for any size commitments.

Leverage will be in the mid-3x through the first lien and mid-4x through the second lien.

Credit Suisse First Boston is the sole lead arranger on the deal, and Wells Fargo Foothill signed on as syndication agent prior to the bank meeting.

Proceeds from the credit facility will be used to help fund a management buyout of the company backed by Thoma Cressey Equity Partners and Trident Capital.

Datatel is a Fairfax, Va., provider of fully integrated enterprise information management solutions for higher education institutions.

Alliance One upsizes

Alliance One increased the size of its term loan A to $150 million from $100 million in a move that was "demand driven," according to a market source. Pricing on the three-year tranche was left unchanged at Libor plus 250 basis points.

Alliance One's now $450 million credit facility (B1) also contains a $300 million three-year revolver with an interest rate of Libor plus 250 basis points.

Wachovia is the lead bank on the deal.

The company is also marketing $650 million of bonds - a total of $400 million of eight-year unsecured senior fixed-rate and seven-year unsecured senior floating-rate notes, with tranche sizes to be determined, and $250 million 10-year unsecured senior subordinated notes. Pricing is expected on April 19.

Proceeds from the credit facility and the bonds will be used to help back the merger of Dimon Inc. and Standard Commercial Corp. into one large leaf tobacco merchant company and refinance existing bank debt.

After the merger, Dimon will be the surviving company and will immediately change its name to Alliance One.

Goodyear closes

The Goodyear Tire & Rubber Co. closed on its new $3.65 billion credit facility, consisting of a $1.5 billion asset-based revolver (Ba3/BB) due in 2010 with an interest rate of Libor plus 175 basis points, a $1.2 billion second-lien term loan (B2/B+) due in 2010 with an interest rate of Libor plus 275 basis points, a $300 million third-lien secured term loan facility (B3/B-) due in 2011 with an interest rate of Libor plus 350 basis points, and the euro equivalents of an approximately $650 million credit facility (B+) for the company's Goodyear Dunlop Tires Europe affiliate consisting of a $450 million revolver due in 2010 with an interest rate of Libor plus 275 basis points and a $200 million term loan due in 2010 with an interest rate of Libor plus 237.5 basis points.

The asset-based revolver was reverse flexed from Libor plus 200 basis points during syndication. However, pricing on the tranche can go up to Libor plus 200 to Libor plus 225 basis points if available undrawn amounts are below $400 million. JPMorgan and Citigroup acted as joint lead arrangers on the asset-based facility, with JPMorgan the left lead.

The second-lien term loan was reverse flexed from original price talk of Libor plus 325 basis points during syndication. JPMorgan and Deutsche led the tranche, which is non-callable for six months, callable at 101 for the next six months and callable at par thereafter.

The third-lien term loan was flexed up during syndication from original price talk in the Libor plus 325 basis points area. JPMorgan and Deutsche Bank Securities Inc. acted as joint lead arrangers on the third-lien term loan, which is secured equally with Goodyear's existing secured bonds due in 2011, and is non-callable for one year, callable at 101 in year two and callable at par thereafter.

The euro facility was marketed in Europe via joint lead arrangers JPMorgan and BNP Paribas, with JPMorgan the left lead.

Proceeds from the Akron, Ohio, tire company's new credit facility (excluding the third-lien term loan) were used to replace a $1.3 billion asset-based credit facility due in 2006 with an interest rate of Libor plus 400 basis points, a $650 million asset-based term loan due in 2006 with an interest rate of Libor plus 450 basis points, a $680 million deposit funded credit facility due in 2007 with an interest rate of Libor plus 450 basis points and $650 million in credit facilities for Goodyear Dunlop Tires Europe due April 30, 2005 with an interest rate of Libor plus 400 basis points.

The third-lien term loan, which was added to Goodyear's refinancing deal around mid-March - about two to three weeks after the company launched its credit facility into syndication - will be used for general corporate purposes.

Goodyear opted to add the third-lien piece because the demand for the originally sized $3.35 billion credit facility had been very solid and the company wanted to give lenders who wanted to get involved another vehicle that they could participate in, a company spokesperson previously explained to Prospect News.

"Extending our debt maturities is a key component of the company's capital structure improvement plan," said Richard J. Kramer, executive vice president and chief financial officer, in a company news release. "This refinancing addresses the majority of our maturities through 2009 and provides cost-effective financing."

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