Smurfit-Stone OID emerges; Big West tweaks deal; Great Point floats talk; Six Flags overfills

By Sara Rosenberg

New York, Jan. 13 - In the primary market on Wednesday, Smurfit-Stone Container Corp. revealed the original issue discount on its term loan as the deal was presented to investors, and Big West Oil LLC came out with some changes to its deal.

Also on the new deal front, Great Point Power LLC started circulating price talk on its upsized term loan as the deal is getting ready for its upcoming launch.

And, word is that Six Flags Theme Parks Inc.'s exit financing term loan has been met very positively by the market since launching late last week, enough so that the book is already more than full.

Smurfit-Stone discount talk

Smurfit-Stone held a bank meeting on Wednesday to kick off syndication on its proposed $1.2 billion six-year term loan, and in connection with the launch, the original issue discount was announced, according to market sources.

The term loan is being offered to investors at a discount of 981/2, the source said.

Price talk on the term loan is Libor plus 500 basis points with a 2% Libor floor, and there is 101 soft call protection for two years.

JPMorgan, Deutsche Bank and Bank of America are the lead banks on the deal exit financing deal.

In addition to the term loan, the company plans on getting a new $650 million revolver, sources said.

Smurfit-Stone is a Chicago-based manufacturer of paperboard and paper-based packaging.

Big West revises terms

Big West Oil announced some revisions to its term loan on Wednesday morning and moved up the commitment deadline to 12:30 in the afternoon from the original Jan. 21 date as a result of strong demand, according to a market source.

Under the changes, the Libor floor on the $360 million five-year term loan is now 2.5%, down from initial talk of 3%, the source said.

Also, the original issue discount was tightened to 97 from initial talk of 96, the source continued, while the actual spread on the loan was left unchanged at Libor plus 950 bps.

And, lastly, 101 soft call protection for one year was added to the term loan, the source remarked.

Big West also getting revolver

On top of the term loan, Big West Oil will also be obtaining a $75 million three-year ABL revolver.

Bank of America is the lead bank on the deal that will be used for exit financing.

Total leverage will be in the area of 2.9 times.

Big West Oil, a wholly owned subsidiary of Flying J Inc., is a Salt Lake City-based complex high conversion refinery.

The facility employs about 130 people, has a total capacity of 35,000 barrels per day and refines a combination of Utah, Wyoming and Canadian crude oils into high-quality motor fuels and other specialty chemicals, including superior wax products.

Great Point talk surfaces

Great Point Power revealed price talk on its proposed $220 million seven-year term loan in preparation for the Thursday bank meeting that will launch the transaction to investors, according to a market source.

The term loan is being talked at Libor plus 375 bps with a 2% Libor floor, the source said, adding that the original issue discount is still to be determined.

When the deal was first announced, it was thought that the loan would be sized at $210 million, but it was later increased.

Barclays and Bank of America are the lead banks on the deal that will be used to fund the acquisition of four power generation plants and one transmission facility from Energy Investors Funds.

Great Point Power is a newly formed portfolio company of ArcLight Capital Partners LLC.

Six Flags met well

Six Flags Theme Parks' term loan is already about 1½ times oversubscribed as it has been very well received by investors, and there are still a lot of people working on the deal, market sources told Prospect News on Wednesday.

"Think that [it] largely got done with pre-petition audience," one source added.

The $680 million six-year term loan is being talked at Libor plus 425 bps with a 2% Libor floor and an original issue discount of 99.

Amortization on the term loan is quarterly installments of 0.25% with the rest due at maturity.

Six Flags' $830 million credit facility (B1), which just launched with a bank meeting on Jan. 7, also includes a $150 million five-year revolver that is being talked at Libor plus 425 bps with a 150 bps undrawn fee, a 2% Libor floor and an original issue discount of 98.

Six Flags lead banks

JPMorgan, Bank of America, Barclays and Deutsche Bank are the joint bookrunners and joint lead arrangers on the Six Flags deal.

Covenants contained in the credit agreement include a maximum senior secured leverage covenant, a minimum consolidated interest coverage covenant and a maximum consolidated capital expenditures covenant.

Mandatory repayments are required from 100% of any debt incurred at Six Flags Theme Parks Inc., 25% of debt at Six Flags Operations Inc. and Six Flags Inc. when the Six Flags Theme Parks leverage ratio is above a level to be agreed and 100% of asset sale proceeds. Also, on an annual basis, commencing with the fiscal year ending Dec. 31, 2010, the company will be required to sweep 50% of its excess cash flow to prepay the term loan.

Six Flags loan to fund exit

Proceeds from Six Flags' credit facility will be used to repay $1.147 billion of pre-petition bank debt upon the company's emergence from Chapter 11. The revolver will also be available for general corporate purposes.

At close, $88 million is expected to be drawn under the revolver.

The company's bankruptcy plan also contemplates the entrance into a new $150 million credit facility from Time Warner Inc. that will be available for draw on May 14 of each year for five years.

Pricing on the loan is Libor plus 525 bps, which is 100 bps higher than the exit facility, with a 2.5% Libor floor.

Proceeds will be used to fund puts exercised by LP unit holders above $10 million in 2010, $12.5 million in 2011 and $15 million thereafter.

Following emergence, the company expects total leverage to be 3.6 times based on projected 2009 cost adjusted EBITDA of $206 million.

Six Flags is a New York-based regional theme park company.

Allion closes

In other news, H.I.G. Capital LLC completed its buyout of Allion Healthcare Inc. in a transaction valued at about $278 million, according to a news release.

To help fund the transaction, Allion closed on its $115 million five-year credit facility on Wednesday, comprised of a $20 million revolver and a $95 million term loan, with both tranches priced at Libor plus 550 bps with a 2% Libor floor.

The revolver has a 50 bps unused fee.

During syndication, the revolver was upsized from $15 million and pricing on both tranches was flexed down from Libor plus 600 bps.

Fifth Third Bank acted as the lead bank on the deal.

Allion is a Melville, N.Y.-based provider of specialty pharmacy and disease management services.

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