UPC upsizes; Trout nets early term loan orders; NewQuest lowers pricing; Hexcel breaks in 101 context

By Sara Rosenberg

New York, Feb. 23 - UPC Financing Partnership officially upsized its term loan H and added an accordion feature to the tranche. In other primary doings, Trout Coal Holdings LLC had received early commitments on both its term loans within a few hours of launching on Wednesday with strong interest partially attributed to the overall need for paper in the market and investors liking the sector. And, NewQuest Health Solutions LLC cut pricing on its term loan B on Wednesday by 25 basis points.

Meanwhile, in the secondary, Hexcel Corp.'s credit facility freed up for trading in the late afternoon, with the institutional paper quoted in the plus 101 context.

UPC Financing increased the size of its seven-year U.S. term loan H to $1.25 billion and has added a €550 million piece to the tranche, with proceeds from the additional debt going toward full repayment of the company's' term loan E, which carries an interest rate of Libor plus 300 basis points and matures in 2009, according to a market source.

Furthermore, a $500 million (or euro equivalent) accordion feature was added to the term loan H with proceeds earmarked for debt repayment.

Recommitments are due Thursday.

Originally, the term loan H was launched with a size of $600 million but was reworked the other week to add the ability to upsize and change pricing.

Initially, the upsizing being considered called for the term loan H to come to $1.6 billion, split between a maximum $1.1 billion U.S. dollar tranche and a $500 million U.S. dollar-equivalent euro tranche that will be marketed to U.S. investors.

Pricing on the term loan H is set at Libor plus 275 basis points (rate locked in for six months) with a step down to Libor plus 250 basis points when leverage falls below 4x. The tranche had been reverse flexed the other week from Libor plus 300 basis points with a step down to Libor plus 275 basis points when leverage falls below 4x.

UPC Financing is a subsidiary of Denver-based broadband network business UnitedGlobalCom Inc.

UnitedGlobalCom's European broadband subsidiary, UPC Distribution Holdings BV, is also working a new deal, as it is in-market with a new €850 million term loan G with an interest rate of Libor plus 250 basis points. The euro tranche does not contain a call protection provision but is being offered with upfront fees of 75 basis points for commitments of up to $35 million, 100 basis points for commitments of $36 million to $50 million in size, 125 basis points for commitments of $51 million to $70 million in size and 150 basis points for any commitments larger than $70 million.

Proceeds from the two term loans (excluding the additional term loan H debt) will be used to refinance the company's existing term loan B and the existing term loan C, which carry an interest rate of Libor plus 550 basis points.

The euro term loan G was launched in January to new and existing banks. However, rollover commitments from lenders who hold positions in the company's euro-denominated term loan B that is being refinanced was expected to, and in fact did, account for basically all of the oversubscribed deal - which has about $1.5 billion in commitments in the book.

Bank of America, Royal Bank of Scotland and ABN Amro are the lead banks on both term loans.

UPC's $525 million term loan F that was recently obtained via TD Securities Inc. and BNP Paribas will remain in place and keep its current pricing of Libor plus 350 basis points, for now. However, after June, the pricing can step down to Libor plus 300 basis points if leverage gets below 4x.

Trout Coal catches interest

Trout Coal's $420 million credit facility was off to a great start after its well-attended bank meeting on Wednesday as the deal has already seen "a lot of activity in the way of commitments" for both its first- and second-lien term loans by evening, according to a market source.

"The market seems to have a pretty good bid for coal and [people are] starved for paper that has any sort of reasonable yield associated with it," the source explained.

At launch, the syndicate revealed opening price talk of Libor plus 300 basis points on the $20 million revolver and $275 million first-lien term loan B, and opening price talk of Libor plus 600 basis points on the $125 million second-lien term loan C.

Both term loans are being offered to investors at par. Any size revolver commitment gets an upfront fee of 100 basis points.

The second-lien term loan contains call protection of 102 in year one and 101 in year two.

Commitments are due March 2.

Lehman and Deutsche Bank are the lead banks on the deal.

Proceeds will be used to refinance existing debt and pay a dividend to sponsor ArcLight Capital Partners.

Trout Coal is a Central Appalachia, W.Va., coal mining company that currently owns five operating coal mines in Central Appalachia and mine developments in West Virginia and Illinois.

NewQuest trims spread

NewQuest reverse flexed pricing on its $165 million six-year term loan B to Libor plus 300 basis points from Libor plus 325 basis points on Wednesday, according to market sources.

Pricing on the $15 million five-year revolver was left unchanged at Libor plus 325 basis points, sources added.

UBS is the lead bank on the deal.

Proceeds from the $180 million credit facility (B1/B) will be used to help fund GTCR Golder Rauner LLC's leveraged buyout of the company.

NewQuest is a Nashville, Tenn., managed care organization that operates commercial and Medicare Advantage health plans through comprehensive provider networks.

Hexcel 101 plus

Hexcel's $225 million seven-year term loan B broke for trading late Wednesday with the paper opening around 101 1/8 bid and then moving up to 101¼ bid, 101 5/8 offered in light trading volume, according to a trader.

A buyside source saw the paper quoted at 101 3/8 bid, 101 5/8 offered by one dealer, with the bid being for $2 million and the offer being for $2 million as well.

"It has ticked up," the buyside source said about Hexcel's levels following the open. "The first bid I saw was 101 1/8 but that was another dealer jumping the gun and throwing out a low ball bid prior to the loan being allocated and before trading actually began."

Hexcel's term loan B is priced with an interest rate of Libor plus 175 basis points. The tranche was reverse flexed from Libor plus 200 basis points on Friday as the book was somewhere around six to seven times oversubscribed.

As could be expected from the strong demand, allocations on the deal were small, the buyside source said, adding that he only got about 15% of what he originally put in for.

Deutsche Bank and Bank of America are the lead banks on the Stamford, Conn., structural materials company's deal.

The $350 million senior secured credit facility (B2/B+) also contains a $125 million five-year revolver with a pricing grid.

Hexcel is getting this new credit facility in connection with its tender offer for the $125 million 9.875% senior secured notes due 2008. The tender offer will expire on Feb. 28.

Charter A continues to tick up

Charter Communications Inc.'s term loan continued to inch its way higher in Wednesday's session, moving up by about a sixteenth of a point, to trade at par, according to a trader.

The St. Louis cable company's paper ended the day with levels of 99 7/8 bid, par 1/8 offered, the trader added.

The trader went on to explain that over the last few weeks, Charter's paper - especially its term loan A - has been minimally stronger essentially on a daily basis as retail investors pounce on discount paper due to lack of supply.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.