Hexcel going well; Vopak subscribed; Nortek launch emerges; Clear Channel LBO on track

By Sara Rosenberg

New York, May 23 - Syndication of Hexcel Corp.'s incremental term loan is moving along nicely as orders have come in at a relatively light discount level, and Vopak Terminal Bahamas Ltd.'s credit facility has fully syndicated and allocations are expected shortly.

Also in the primary, Nortek Inc. came out with timing on its revolving credit facility and the leveraged buyout of Clear Channel Communications Inc. is progressing as the banks have now fully funded the debt for the transaction.

Hexcel's $75 million incremental term loan has been met with a positive reaction by investors since launching with a conference call during the week of May 12, according to a market source.

In fact, the source said that the deal is basically already done.

The term loan is being talked at Libor plus 250 basis points with an original issue discount in the mid-99s.

Deutsche Bank is the lead bank on the deal.

Hexcel is a Stamford, Conn.-based advanced structural materials company.

Vopak fills out

Vopak Terminal Bahamas' $417 million senior secured credit facility is fully subscribed at initial terms and the hope is that allocations will go out on Tuesday, according to a market source.

The facility consists of an $85 million eight-year working capital revolver, a $325 million eight-year term loan and a $7 million revolving debt service reserve facility that is being provided by ABN and is not being syndicated.

The working capital revolver and the term loan are priced at Libor plus 200 bps for years one through five and at Libor plus 225 bps for years six through eight.

The revolver has a 50 bps unused fee.

Upfront fees were offered on the revolver and the term loan that were geared toward the commitment amount. The tranches were offered pro rata, so investors had to take a piece of both.

ABN Amro and DnB NOR Bank are the joint lead arrangers and joint bookrunners on the deal, with ABN the left lead. In addition, Natixis provided a significant commitment as an agent early on.

Proceeds from the facility, which already funded, were used to help finance the formation of the Vopak Terminal Bahamas joint venture by First Reserve Corp. and Vopak through the acquisition of Bahamas Oil Refining Co., an oil storage terminal in Freeport, Bahamas, from Petróleos de Venezuela.

The oil terminal is the largest oil storage facility in the Caribbean with 73 oil tanks of different sizes, with a total capacity of more than 3 million cubic meters and expansion up to 5 million cubic meters for storage of crude oil, bunker fuel oil and various other petroleum products.

Nortek launch date surfaces

Nortek pinned down timing on the launch of its $350 million five-year senior secured asset-based revolving credit facility as a bank meeting has been scheduled for Wednesday, according to a market source.

Closing on the revolver already took place on May 20.

Bank of America, Credit Suisse and Goldman Sachs are the lead banks on the deal.

Availability under the facility is initially limited to $175 million.

Revolver borrowings of $50 million, along with $750 million in senior secured notes, were used to repay the company's existing senior secured credit facility.

Nortek is a Providence, R.I.-based manufacturer and distributor of building products for residential, light commercial and commercial applications.

Clear Channel clears hurdle

The buyout of Clear Channel is now on track as the banks fully funded the debt needed for the transaction and those funds have been secured in an escrow account.

Equity financing for the transaction is required to be put into escrow by May 28 by the private equity sponsors and certain shareholders investing in the merged company.

Placement of financing into escrow accounts was part of the recent settlement agreement reached between the company, the equity sponsors and the banks in connection with lawsuits, under which Clear Channel accused the banks of refusing to execute necessary documents in an effort to cause the buyout to collapse.

Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, RBS and Wachovia are the lead banks on the debt.

Clear Channel is being bought by Bain Capital Partners LLC and Thomas H. Lee Partners LP for $36.00 in cash or stock per share, in a transaction valued at about $17.9 billion. The purchase price was lowered from $39.20 per share in connection with the settlement agreement.

Details on the debt financing for the amended acquisition agreement have not yet come out.

Under the previous agreement of $39.20 per share, the company was planning on getting a $19.525 billion credit facility - comprised of a $1 billion receivables-backed revolver, a $2 billion revolver, a $1.25 billion term loan A, a $12.65 billion term loan B, a $625 million delayed-draw term loan and an up to $2 billion term loan C that would be reduced by proceeds from asset sales prior to closing - and $2.6 billion of bonds, comprised of $1.1 billion of senior cash pay notes and $1.5 billion in senior pay-in-kind option notes.

The transaction is expected to close by the end of the third quarter, subject to shareholder approval.

Clear Channel is a San Antonio media and entertainment company specializing in "gone from home" entertainment and information services.

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