Bucyrus, Hayes, RE/MAX tweak deals; Noranda breaks; Hawkeye rallies; Foamex still soft on numbers

By Sara Rosenberg

New York, May 16 - Bucyrus International Inc. revised tranching on its credit facility and reduced pricing on the U.S. term loan B, Hayes Lemmerz International Inc. flexed pricing lower on its institutional bank debt and RE/MAX International Inc. trimmed the spread on its term loan tranches.

Meanwhile, in the secondary market, Noranda Aluminum Acquisition Corp.'s credit facility freed up for trading during Wednesday's market hours, with the term loan B quoted atop par.

Also in trading, Hawkeye Renewables LLC's bank debt headed noticeably higher and Foamex International Inc.'s second-lien term loan was active at lower levels, still in reaction to the company's poor first-quarter financial results.

Bucyrus came out with some changes to its credit facility on Wednesday, including downsizing the U.S. term loan B to account for equity proceeds, lowering pricing on the U.S. term loan B and upsizing the German revolver, according to a market source.

The U.S. term loan B is now sized at $400 million, down from $725 million, and pricing was reverse flexed to Libor plus 150 basis points from original talk at launch of Libor plus 175 bps to 200 bps, the source said.

The reduction in the U.S. term loan B size is a result of the company selling 4.614 million shares of class A common stock at $66.35 per share, for net proceeds of about $292.3 million, and an additional 692,100 shares of class A common stock to the underwriters at the same price, for proceeds of roughly $44 million.

Another modification made to the company's credit facility was an upsizing of the German revolver to €65 million from €50 million, the source remarked. Pricing on this tranche remained at Libor plus 175 bps with step downs tied to a leverage grid.

Recommitments from lenders are due by noon on Thursday.

Bucyrus' now approximately $980 million (down from approximately $1.29 billion) credit facility (Ba3/BB-) also includes a $400 million revolver priced at Libor plus 175 bps with step downs tied to leverage, and a €75 million term loan B priced at Euribor plus 175 bps.

Lehman Brothers is the lead bank on the deal, which will be used to help fund the already completed acquisition of Lunen, Germany-based DBT GmbH, a subsidiary of RAG Coal International, for $710 million in cash and 471,476 shares of stock.

Bucyrus is a South Milwaukee, Wis., designer and manufacturer of walking draglines, electric rope mining shovels and rotary blasthole drills used by the surface mining industry.

Hayes cuts spreads

Hayes Lemmerz reduced pricing on its $350 million euro-denominated term loan and its $20 million synthetic letter-of-credit facility to Libor plus 275 bps from original talk at launch of Libor plus 300 bps, according to a market source.

Pricing on the company's $125 million revolver was left unchanged at Libor plus 300 bps, the source added.

Citigroup and Deutsche Bank are the joint lead arrangers and joint bookrunners on the $495 million senior secured credit facility (B2/B/BB).

Proceeds will be used to refinance the company's existing credit facility and for working capital and other general corporate purposes.

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

RE/MAX flexes lower

Elsewhere in the primary market, RE/MAX announced on Wednesday that it reverse flexed pricing on its $300 million in funded and delayed-draw term loan debt, according to a market source.

With the changes, the $145 million eight-month funded term loan B and the $155 million eight-month delayed-draw term are now both priced at Libor plus 175 bps, the source said.

When the deal was first launched, it was presented with initial price talk of Libor plus 250 bps, but with the condition that pricing could change once ratings came out. It was said that if the corporate rating is at least Ba3/BB-, then pricing on the two term loans would be Libor plus 200 bps, and if the corporate rating is less than Ba3/BB-, then pricing would be Libor plus 250 bps.

Following the launch, ratings came out - though they are private - so price talk was reset to Libor plus 200 bps, making Wednesday's flex a 25 bps reduction, the source explained.

The 50 bps undrawn fee on the delayed-draw term loan was left unchanged, the source added.

Citigroup is the lead bank on the Denver-based real estate company's deal.

Proceeds from the funded term loan B will be used to fund the acquisitions of independently owned RE/MAX of California and Hawaii, and proceeds from the delayed-draw will be used to fund the acquisitions of independently owned RE/MAX of Carolina and Florida.

Noranda frees to trade

Noranda Aluminum's credit facility allocated and broke for trading, with the $500 million seven-year term loan B quoted at par 5/8 bid, par 7/8 offered, according to a trader.

The term loan B is priced at Libor plus 200 bps with a step down to Libor plus 175 bps when net senior secured leverage is less than or equal to 1.0 times.

During syndication, pricing on the term loan B firmed up at the tight end of original talk of Libor plus 200 bps to 225 bps and the step down was added.

Noranda Aluminum's $750 million credit facility (Ba2/BB-) also includes a $250 million six-year revolver.

Merrill Lynch, Citigroup and Goldman Sachs are the lead banks on the deal, with Merrill Lynch the left lead.

Proceeds will be used to help fund Apollo Management LP's acquisition of Xstrata Aluminum from Xstrata plc for a total cash consideration of $1.15 billion.

Xstrata Aluminum was created from the former Falconbridge Group's aluminum assets, known as Noranda Aluminum, following Xstrata's acquisition of Falconbridge Ltd. in 2006.

Noranda Aluminum comprises a 100% owned primary smelter in New Madrid, Tenn., and three modern rolling mills in Tennessee, North Carolina and Arkansas, together with a 50% interest in the Gramercy aluminum refinery in Louisiana and St. Ann bauxite mine in Jamaica, both of which are owned through a joint venture with Century Aluminum Inc.

Hawkeye trades stronger

In other trading news, Hawkeye Renewables' first- and second-lien term loan debt made quite a splash on Wednesday as levels jumped up by about a point or two despite the lack of any specific company news, according to a trader.

The first-lien term loan ended the session at 98½ bid, 99½ offered and the second-lien term loan ended the session at 97¾ bid, 98¾ offered, the trader said.

"I'm not sure why they're up but they're much stronger," the trader remarked.

Hawkeye Renewables is an Iowa Falls, Iowa, manufacturer of alcohol-based fuel derived from corn.

Foamex active

Foamex's second-lien term loan still felt pressured on Wednesday as investors continued to react to the company's disappointing first-quarter numbers, according to a trader.

The second-lien term loan ended the day at 101½ bid, 102 offered, down "a little bit" from previous levels, the trader said.

On Monday, the company announced first-quarter results that included net sales of $317.2 million, down 13% from $365.9 million in the first quarter of 2006; gross profit of $38.5 million, down from $61.1 million in the first quarter of 2006; income from operations of $20.6 million, down from $36.7 million in the first quarter of 2006; and net loss of $17 million, or $1.01 per share, compared to net income of $17.1 million, or $1.78 per diluted share, in the first quarter of 2006.

Net sales were lower primarily because of lower volumes in the foam products and carpet cushion products segments, and gross profit was down primarily because of lower volumes and prices.

Foamex is a Linwood, Pa.-based producer of polyurethane foam-based solutions and specialty comfort products.

Pantry closes

The Pantry Inc. closed on its new $675 million credit facility (Ba3/BB), according to a company news release.

The facility consists of a $225 million six-year revolver priced at Libor plus 150 bps, a $350 million seven-year covenant-light term loan B priced at Libor plus 175 bps and a $100 million seven-year covenant-light delayed-draw term loan priced at Libor plus 175 bps with an unused fee of 75 bps for the first six months and 87.5 bps for months seven through 12.

During syndication, the revolver was upsized from $200 million.

JPMorgan acted as the lead bank on the deal.

Proceeds were used to refinance the Sanford, N.C., convenience store chain's existing debt.

"We are pleased to complete the renegotiation of our credit agreement on favorable terms. We were able to significantly expand the size and extend the maturities of our facilities with pricing comparable to our previous agreement. In addition, the other terms and covenants are less restrictive, enhancing our overall financial flexibility and our ability to take advantage of further acquisition opportunities," Peter J. Sodini, chairman and chief executive officer, said in the release.

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