Greatwide Logistics frees to trade; Warner Chilcott dips with repricing; Movie Gallery softens on numbers

By Sara Rosenberg

New York, Jan. 22 - Greatwide Logistics Services' credit facility hit the secondary market on Monday, with levels on the first-lien term loan quoted in the pars.

In other trading news, Warner Chilcott Corp.'s term loan B dropped off a bit as news of a repricing made its way through the market and Movie Gallery Inc.'s term loan B weakened after the release of poor third-quarter financials.

Greatwide Logistics' credit facility freed for trading during Monday's market hours, with the $290 million first-lien term loan (B1) quoted at par 3/8 bid, par 7/8 offered, according to a trader.

The first-lien term loan is priced at Libor plus 325 basis points.

During syndication, pricing on the first-lien term loan was flexed up from revised talk of Libor plus 275 to 300 bps and from original talk at launch of Libor plus 250 to 275 bps.

Greatwide's $487 million credit facility also includes a $70 million revolver (B1) priced at Libor plus 325 bps and a $127 million second-lien term loan (Caa1) priced at Libor plus 625 bps.

During syndication, pricing on the revolver was flexed up from revised talk of Libor plus 275 to 300 bps and from original talk at launch of Libor plus 250 to 275 bps, and pricing on the second-lien term loan firmed up at the wide end of original talk of Libor plus 600 bps to 625 bps.

Proceeds from the credit facility, along with a $95 million holdco senior unsecured note priced at 13½%, are being used to fund Investcorp's leveraged buyout of Greatwide Logistics from Fenway Partners.

The senior unsecured holdco mezzanine note was upsized from $80 million during syndication and pricing ended up at the high end of the original 13% to 13½% talk.

The upsizing to the mezzanine tranche was a result of the sponsors deciding to reduce their equity contribution by $15 million.

UBS and Bear Stearns acted as the joint lead arrangers and joint bookrunners on the credit facility and mezzanine financing, with UBS the left lead.

Greatwide Logistics is an Irving, Texas, transportation and logistics provider.

Warner Chilcott backpedals on repricing

Continuing on the trading front, Warner Chilcott's term loan B came under some pressure as news surfaced that the company is trying to lower the spread on the debt, according to a trader.

The term loan B closed the session at par ½ bid, 101 offered, down from previous levels of par ¾ bid, 101¼ offered, the trader said.

Under the repricing proposal, the company is looking to reduce the term loan B spread to Libor plus 200 bps from Libor plus 225 bps.

Warner Chilcott is a U.K.-based branded pharmaceutical manufacturer and marketer.

Movie Gallery down with numbers

Also in the secondary, Movie Gallery's term loan B levels softened on Monday, especially on the bid side, as investors reacted to the "bad" third-quarter results that were announced early on in the day, according to traders.

The term loan B closed the session at 98¼ bid, 98¾ offered, according to one trader, and at 98 bid, 99 offered, according to a second trader. By comparison, at the close Friday, the bank debt was being quoted at 98½ bid, 99 offered.

For the third quarter of 2006, the company reported a net loss of $36.1 million, or $1.13 per share, compared with a net loss of $12.5 million, or $0.39 per share, in the comparable period last year. Included in the net loss is $18.3 million of pre-tax charges, primarily non-cash, related to accounting for asset retirement obligations, store closures, the company's continued restructuring efforts and stock compensation expense.

Also for the quarter, total revenues were $583 million, an increase of 1.8% over revenues of $572.4 million last year, and adjusted EBITDA was $35.9 million.

These unimpressive financial results came on the heels of the company's Friday 10-Q filing with the Securities and Exchange Commission that warned of potential covenant violations for the first quarter of 2007.

The Dothan, Ala.-based movie rental company is exploring various strategies regarding further amendments to its credit facility or a refinancing that could include raising additional equity, sale/leaseback transactions and subleasing and restructuring store leases.

A fund manager told Prospect News on Monday that Movie Gallery has not yet approached lenders on a possible amendment and that the covenant compliance warning had little affect on the loan trading levels since it is for first-quarter 2007.

The fund manager went on to say that third-quarter 2006 covenant compliance has been maintained and that the company is expected to remain in compliance through the fourth quarter of 2006.

GM trades up

Meanwhile, General Motors Corp.'s term loan continued to trade strong on Monday with levels inching up by about an eighth of a point, according to a trader.

The term loan closed the day at 101 bid, 101 3/8 offered, compared to previous levels of par 7/8 bid, 101 1/8 offered, the trader said.

General Motors is a Detroit-based automaker.

Brand Energy sets talk

On the primary side of things, Brand Energy & Infrastructure Services Inc. released pricing guidance on its proposed first- and second-lien credit facility that was launched with a bank meeting last Thursday, according to a market source.

The $530 million first-lien term loan B (B1) is being talked in the range of Libor plus 250 to 275 bps, while the $350 million second-lien term loan (B3) is being talked in the range of Libor plus 625 to 650 bps, the source said.

Brand Energy's $1.03 billion credit facility also includes a $150 million revolver (B1).

Morgan Stanley and Credit Suisse are the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds will be used to help fund First Reserve Corp.'s leveraged buyout of the company from J.P. Morgan Partners, LLC.

Closing is expected by the end of the first quarter, subject to regulatory approval and other customary closing conditions.

Brand Energy & Infrastructure Services is a Kennesaw, Ga., provider of scaffolding services.

Navistar closes

Navistar International Corp. closed on its $1.5 billion five-year credit facility (NA/NA/BB-) consisting of a $400 million synthetic revolver and a $1.1 billion five-year senior unsecured term loan, according to a company news release.

Both tranches are initially priced at Libor plus 325 bps and are non-callable for one year and then callable at 101 in year two and par thereafter. The spread on the two tranches can range from Libor plus 300 to 400 bps based on the company's credit rating in effect from time to time.

During syndication, the synthetic revolver was upsized from $200 million, and pricing on both the term loan and the revolver firmed up at the wide end of revised price talk of Libor plus 300 to 325 bps, but tighter than original talk at launch of Libor plus 350 bps.

JPMorgan, Credit Suisse, Bank of America and Citigroup acted as the lead banks on deal that actually closed Friday, with JPMorgan the left lead.

Proceeds were used to replace the company's existing senior unsecured $1.5 billion credit facility, which expires in March 2009.

Navistar is a Warrenville, Ill., producer of commercial truck, school bus and mid-range diesel engines.

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