Telcordia seeks recommitments at higher pricing; Alion sets add-on launch, National Dairy cuts pricing

By Sara Rosenberg and Paul A. Harris

New York, March 10 - Telcordia Technologies Inc. has asked bank loan players to recommit to its credit facility at slightly higher pricing levels on the term loan B due to some newly found revenue shortfalls.

Meanwhile, timing on the launch of Alion Science and Technology Corp.'s term loan add-on, as well as pricing, surfaced on Thursday, and National Dairy Holdings LP reduced pricing on both its revolver and term loan tranches.

Telcordia approached loan investors on Thursday morning, asking them to recommit to the term loan B by Friday at a pricing level that was raised by 25 basis points and has opted to relaunch its canceled $300 million senior subordinated notes offering with pricing expected Friday, according to market sources.

On Wednesday, the syndicate had - to everyone's surprise - come out and canceled all bank loan trades and commitments, and pulled the bond deal with little explanation, saying that more information would come out in the conference call Thursday morning - a promise that they kept.

Investors were told during the call that $20 million to $30 million of first quarter 2005 revenue shortfalls were found caused by delayed closing of $5 million to $10 million of software and equipment sales contracts, a market source told Prospect News.

Because of the revenue shortfalls, management and sponsors opted to delay closing of the leveraged buyout financing package so it could relaunch the bond deal and raise pricing on the term loan B.

The $570 million term loan B is now being offered to investors at Libor plus 225 basis points, up from the Libor plus 200 basis points pricing level that the deal was originally allocated at last Friday. The syndicate, however, did add a step down in pricing to Libor plus 200 basis points if leverage falls below 5x, a market source said.

When the Telcordia term loan B first launched around mid-February, the tranche was sized at $520 million but was increased to $570 million after the bond deal was decreased to $300 million from $350 million. Also, initial price talk on the tranche at launch was Libor plus 250 basis points, but the deal reverse flexed to Libor plus 200 basis points during syndication on strong investor interest.

Price talk has not yet surfaced on the bond deal that is being remarketed. Original pricing that was set on Feb. 25 was par to yield 8 7/8%. Funding had been scheduled to take place on Wednesday.

Telcordia's $670 million credit facility (B1/B+) also contains a $100 million revolver with an interest rate of Libor plus 250 basis points.

Proceeds from the credit facility and the bonds will be used to help fund the leveraged buyout of Telcordia by Providence Equity Partners and Warburg Pincus for $1.35 billion in cash.

JPMorgan, Bear Stearns, Deutsche and Lehman are the lead banks on the credit facility, with JPMorgan the left lead.

Telcordia is a Piscataway, N.J, provider of telecommunications software and services for IP, wireline, wireless and cable.

Alion sets timing, pricing

Alion Science and Technology Corp. has scheduled a conference call for Friday to launch its proposed $72 million five-year term loan B add-on with opening pricing on the incremental bank debt set at Libor plus 225 basis points, according to a syndicate document.

Credit Suisse First Boston is the lead bank on the deal.

Proceeds from the incremental term loan will be used to finance acquisitions and for other general corporate purposes.

In addition to getting the add-on, the company is also looking to amend its credit facility to reduce the interest rate on its term loan and permit a maximum leverage ratio of 3.75 to 1.0 through Dec. 31, 2005, according to an 8-K that was filed with the Securities and Exchange Commission Wednesday.

Alion is a McLean, Va.-based research and development company primarily serving the U.S. government.

National Dairy cuts pricing

National Dairy Holdings LP reverse flexed pricing on its $250 million credit facility, cutting the initial interest rate on the $75 million six-year revolver to Libor plus 200 basis points from Libor plus 225 basis points and cutting the interest rate on the $175 million seven-year term loan B to Libor plus 200 basis points from Libor plus 250 basis points, according to a syndicate document.

Wachovia is the lead bank on the recapitalization deal.

National Dairy is a Dallas operator of dairy processing facilities.

Hayes repricing expected to pass

Hayes Lemmerz International Inc.'s repricing of its $450 million term loan B at Libor plus 325 basis points from Libor plus 375 basis points is expected to pass based on verbal communications from lenders, according to a market source, who explained that at this point it's just a matter of getting everyone to send their consents in writing and going through them.

The consent deadline was Thursday.

The amendment proposal, which was launched on March 3 via a conference call, also asked lenders to allow for the issuance of about $150 million in euro-denominated senior unsecured notes and allow for about half of the note proceeds to go toward general corporate purposes with the remainder going toward term loan repayment.

Furthermore, the company asked lenders to modify some financial covenants and grant permission to use about 50% of the net proceeds from the proposed divestiture of the company's Commercial Highway Hub and Drum business for capital expenditures.

Citigroup is the lead bank on the deal.

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

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