TASC loan could see changes; Hayes Lemmerz allocations near; MEG Energy, Targa ready launches

By Sara Rosenberg

New York, Dec. 4 - Market chatter is that TASC Inc.'s term loan B may possibly see some sort of revision to pricing because the deal was so well received by investors, and Hayes Lemmerz International Inc. wrapped syndication on its term loan on Friday and is hoping to allocate within the next few days.

In other primary happenings, two deals emerged for the week of Dec. 7 - one for MEG Energy Corp., which includes a new credit facility as well as an amendment and extension of its existing term loan debt, and one for Targa Resources Inc.

TASC pricing may be tweaked

TASC's $390 million term loan B was multiple times oversubscribed by the time the books closed this past Wednesday, sparking the expectation by some market sources that pricing on the tranche could change.

Whether it will be the actual spread, the Libor floor and/or the original issue discount is unclear as no official word on any revisions has been announced as of yet, sources said.

Currently, the term loan B is being talked at Libor plus 400 basis points with a 2% Libor floor and an original issue discount of 981/2.

TASC's $690 million senior secured credit facility (Ba2) also includes a $100 million revolver and a $200 million term loan A, with both tranches talked at Libor plus 375 bps with a 2% Libor floor.

The original issue discount on the revolver is talked at 98 and the original issue discount on the term loan A is talked at 981/2.

Initially it was thought that the company would only get a total of $580 million of term loan debt, but the amount was upsized by $10 million prior to the deal's Nov. 20 bank meeting.

TASC lead banks

Barclays Capital, Deutsche Bank Securities and RBC Capital Markets are the lead banks on TASC's credit facility, with Barclays the left lead. In addition, CPPIB Credit Investments Inc. has provided commitments toward the facility as an investor.

Proceeds will be used to help fund the purchase of the company by an investor group led by General Atlantic LLC and Kohlberg Kravis Roberts & Co. from Northrop Grumman Corp. in a transaction valued at $1.65 billion.

Other financing for the buyout will come from $310 million of senior subordinated notes (mezzanine debt) that has been pre-placed. KKR Capital Markets arranged the mezzanine financing and Highbridge Mezzanine Partners is the lead investor.

Closing on the transaction is expected to take place in the fourth quarter, subject to customary approvals.

TASC is a Chantilly, Va.-based provider of advanced systems engineering and technical assistance to the defense, intelligence, federal, state and local markets.

Hayes Lemmerz deadline hits

Hayes Lemmerz shut the books on its $150 million term loan on Friday and the plan is to close and allocate the deal during the week of Dec. 7, a market source told Prospect News.

The term loan is currently being talked at Libor plus 800 bps with a 2% Libor floor and an original issue discount in the area of 96 to 97.

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

Under the company's plan of reorganization, which was confirmed by the court earlier this month, total consolidated pre-petition funded debt of roughly $720 million is expected to be reduced to about $240 million upon emergence.

Hayes Lemmerz is a Northville, Mich.-based maker of automotive and commercial highway wheels.

MEG Energy launching deal

MEG Energy revealed on Friday that it will be launching a new $450 million credit facility (B2) and an amendment and extension of its current term loan borrowings at a bank meeting on Tuesday morning, according to a market source.

The new credit facility consists of a $300 million term loan due in early 2016 and a $150 million revolver due in early 2013, with price talk still to be determined, the source said.

Proceeds from the new debt will be used to fund the company's future expenditures and continued development.

MEG Energy amends, extends

In addition to the new credit facility, MEG Energy is also going to launch an amendment to its existing credit facility that would extend existing term loan maturities to early 2016 to match the maturity of the new term loan, the source remarked.

Currently, the company has about $750 million in outstanding term loans with most of that maturing in 2013 and the rest maturing in 2014.

Price talk on the extended term loan debt is still to be determined but it will be higher than current pricing, the source added.

Barclays and Credit Suisse are the joint bookrunners on the transactions.

MEG Energy is a Calgary, Alberta-based oil sands development company.

Targa sets launch

Targa Resources has scheduled a bank meeting for Tuesday to launch its $700 million senior secured credit facility, according to a market source.

The facility consists of a $150 million 41/2-year revolver and a $550 million 61/2-year term loan, with price talk still to be determined, the source said.

Deutsche Bank, Credit Suisse and Citadel are the leads on the deal that will be used to repay and refinance the company's existing bank debt, repay a portion of Targa Resources Investments Inc.'s holdco loan due 2015 and refinance $250 million of 8½% senior unsecured notes due 2013.

Targa is a Houston-based provider of midstream natural gas and natural gas liquid.

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