Hayes, Fairway Market break; Clear Channel firm on bond news; Targa, MEG Energy net interest

By Sara Rosenberg

New York, Dec. 11 - Hayes Lemmerz International Inc. increased pricing on its term loan, finalized the original issue discount at the wide end of talk and then freed the deal up for trading where it was seen bid with no offers.

Also in the secondary, Fairway Market LLC's credit facility allocated and broke for trading during Friday's market hours, and Clear Channel Communications Inc.'s term loan B was steady to higher after news of a bond offering emerged.

In other news, Targa Resources Inc.'s credit facility has already seen some positive attention from the market since launching just a few days ago and MEG Energy Corp. has some good early momentum as well.

Hayes tweaks deal, breaks

Hayes Lemmerz came out with some updates to its $150 million term loan, including a lift in pricing and a final original issue discount, and then the loan hit the secondary market where it was quoted at 96½ bid, no offers, according to a market source.

Pricing on the term loan was flexed up to Libor plus 950 basis points from initial talk of Libor plus 800 bps, the source said.

Also, the original issue discount was set at 96, the high end of initial talk of 96 to 97, the source remarked.

The term loan has a 2% Libor floor.

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 already confirmed by the court, 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.

Fairway frees to trade

Fairway Market's credit facility also broke for trading on Friday, with the term loan seen bid above the original issue discount at which it was sold, according to a market source.

The $105 million five-year term loan was quoted at 98 bid, the source said.

Pricing on the term loan is Libor plus 950 bps with a 2.5% Libor floor and it was sold at an original issue discount of 97.

During syndication, the term loan was upsized from $100 million, pricing was flexed up from Libor plus 800 bps and the discount firmed at the wide of the initial 97 to 98 talk.

Fairway Market's $114 million credit facility also includes a $9 million 4½ year revolver that was downsized from $15 million when the term loan was increased.

Credit Suisse and Jefferies are the lead banks on the deal that is being used to refinance existing debt and for expansion capital, with Credit Suisse the left lead.

Fairway is a supermarket chain with locations in New York and New Jersey.

Clear Channel holds strong

Clear Channel's term loan B was unchanged to better on Friday, depending on which trader was asked, on the back of news of a new senior notes offering.

The term loan B was quoted by one trader at 79½ bid, 80½ offered, flat on the day, and by a second trader at 80 bid, 81 offered, up from 79½ bid, 80½ offered.

On Thursday night, Clear Channel's subsidiary, Clear Channel Outdoor Holdings Inc., said that its subsidiary, Clear Channel Worldwide Holdings Inc. will be selling $750 million of senior notes.

Clear Channel Outdoor will receive the proceeds from the note sale and will use those funds to repay about $730 million of debt owed to Clear Channel Communications.

The fact that the company is selling notes is not a big surprise as an offering has been rumored in the market for a little while now. However, the rumors estimated that the offering could be as much as $2.5 billion.

Clear Channel is a San Antonio-based media and entertainment company.

Targa moving along

Over in the primary market, Targa Resources has received some "good feedback" from investors since its Dec. 8 bank meeting, and there were already a number of commitments in towards the deal by Friday morning, 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 B, with both tranches talked at Libor plus 400 bps to 425 bps.

The term loan B has a 2% Libor floor and is being offered at an original issue discount of 98½ to 99.

The revolver has a 75 bps unused fee.

Deutsche Bank, Credit Suisse and Citadel are the leads on the $700 million deal that will be used to refinance the company's $250 million of 8½% senior unsecured notes due 2013, its existing senior secured term loan due 2012 and a portion of Targa Resources Investments Inc.'s holdco loan due 2015.

Targa leverage multiples

With this refinancing, net leverage at Targa and the holdco will be 4.4 times versus 4.8 times currently, consolidated leverage will be 4.1 times versus 4.2 times currently, and stand-alone net leverage will be 3.1 times.

Interest coverage is 4.3 times.

Covenants under the proposed credit facility include maximum total leverage of 5.75 times in 2010 and 2011, stepping down to 5.50 times in 2012 and 5.25 times in 2013 and thereafter, and a minimum interest coverage ratio of 1.50 times.

There is a $75 million accordion feature if total leverage is less than 3.75 times and any incremental term loan must be used to repurchase the holdco loan. Incremental loans are subject to 50 bps MFN.

Commitments toward the credit facility are due on Dec. 16 with closing targeted for late this month.

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

MEG gets commitments

MEG Energy has already received a "bunch of orders" towards the new money portion of its transaction since its Dec. 8 launch, and the feedback on the company's amend and extend has been positive as well, according to a market source.

The $450 million new money credit facility (B2/BB+) consists of a $150 million revolver due in January 2013 and a $300 million term loan due in April 2016, with both tranches talked at Libor plus 400 bps.

The new term loan is being offered with an original issue discount of 98½ and a 2% Libor floor.

And, the new revolver is being offered at a discount of 98 with no Libor floor.

Proceeds from the new credit facility will be used for future expenditures and continued development.

MEG amend and extend

In addition to the new credit facility, MEG Energy is looking to amend and extend the maturities on about $750 million of existing term loan debt to April 2016. As of now, most of the term loan debt matures in 2013 and a small piece matures in 2014.

Price talk on the extended term loans is Libor plus 400 bps, compared to pricing on the non-extended loan of Libor plus 200 bps.

The extended term loans have a 2% Libor floor and are being offered with 75 bps of fees, comprised of a 60 bps extension fee and a 15 bps amendment fee.

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

Commitments and consents are due from lenders on Dec. 18.

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

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