Casella facility, bonds expected to succeed on second try due to better market conditions

By Sara Rosenberg

New York, Jan. 14 - Casella Waste Systems Inc. is making a second attempt at obtaining a new credit facility as the company launched a $325 million senior secured credit facility on Tuesday in what can only be described as an incredibly busy day for new issues. The loan is expected to go very well this time around and was only postponed previously due to rough conditions in the high-yield bond market.

"It should go really well," one source told Prospect News regarding the deal.

A syndicate source agreed with the assessment, saying: "It's an existing issuer. They've been successful in the past. People feel like they know the company."

Casella Waste's facility consists of a $175 million five-year revolver with an interest rate of Libor plus 300 basis points and a $150 million term loan B with an interest rate of Libor plus 350 basis points, according to a syndicate source. Fleet Securities and Bank of America are the lead banks on the deal.

The deal is coming in conjunction with the company's renewed plans to sell $150 million of senior subordinated notes.

Proceeds from the notes combined with initial borrowing under the credit facility will be used to repay borrowings under the company's existing senior secured credit facility and for general corporate purposes.

The company already tried to complete the note offering and obtain a new facility this past summer, however, syndication of the loan was put on hold when the note offering was postponed due to poor market conditions.

Fleet Securities and Bank of Americas were the lead banks on the credit facility in July that consisted of a $175 million five-year revolver with an interest rate of Libor plus 275 basis points and a $125 million term loan B with an interest rate of Libor plus 325 basis points.

Both the bank loans and the bonds were going to be used to pay about $277 million in funded debt. Without the bonds, the company would have had to draw down almost the entire facility, leaving no availability for working capital.

Casella Waste Systems is a Rutland, Vt. provider of collection, transfer, disposal and recycling services.

Nexstar Broadcasting Group Inc.'s $260 million credit facility, which launched on Tuesday, was "a massive blowout", a source close to the deal told Prospect News. Bank of America and Bear Stearns are the lead banks on the deal.

The loan consists of an $85 million revolver with an interest rate of Libor plus 325 basis points and a $175 million term loan B with an interest rate of Libor plus 350 basis points, sources said.

Proceeds will be used to refinance existing debt.

Nexstar is a Clarks Summit, Pa. owner and operator of television stations.

Fisher Scientific launched a $550 million credit facility, consisting of a $150 million five-year revolver with an interest rate of Libor plus 300 basis points and a $400 million term loan B with an interest rate of Libor plus 300 basis points.

JPMorgan, Deutsche and Credit Suisse First Boston are the lead banks on the deal that will be used to help fund the refinancing of $600 million 9% senior subordinated notes due 2008.

Fisher Scientific is a Hampton, N.H. manufacturer of scientific instruments, equipment and supplies.

Houghton Mifflin launched a $575 million credit facility consisting of a $325 million revolver with an interest rate of Libor plus 325 basis points and a $250 million term loan B with an interest rate of Libor plus 375 basis points.

CIBC, Goldman Sachs and Deutsche are the lead banks on the deal that will be used to help fund the Boston publishing company's buyout from Vivendi Universal by Thomas H. Lee Partners, Blackstone Group, Bain Capital and Apax Partners.

And, CSX Lines LLC launched a $200 million credit facility consisting of a $175 million six-year term loan B with an interest rate of Libor plus 400 basis points and a $25 million five-year revolver with an interest rate of Libor plus 350 basis points.

ABN Amro and UBS Warburg are joint lead arrangers on the deal that will be used to help fund the acquisition of the Charlotte, N.C. container shipping unit by the Carlyle Group.

In secondary news, PanAmSat Corp.'s bank debt moved up by about ¼ to ½ point on Tuesday following the release of fourth quarter and year-end financial results. The loan was quoted with a 97¾ bid and a 98¾ offer, according to a trader.

"The numbers came out. They were positive. The paper went up," the trader said.

For the year ended Dec. 31, 2002, revenues were $812.3 million compared to revenues of $870.1 million for 2001, EBITDA was $591.6 million compared to $580.1 million for the same period in 2001, free cash flow was $460.9 million and earnings per share was 57 cents compared to 20c per share in 2001. The company ended the year with over $880 million in cash and short-term investments with access to another $250 million in available credit.

For the fourth quarter revenues were $196.8 million compared to revenues of $203.7 million for the fourth quarter of 2001, EBITDA was $144.4 million compared to $139.3 million for the same period in 2001and earnings per share was 16c compared to 2c per share for the fourth quarter of 2001 and average analyst estimates of 13c per share.

"PanAmSat has had, without a doubt, the strongest year in its history while we also achieved several company milestones. First of all, we completed our $2.0 billion fleet modernization program and added 404 transponders to our fleet in less than 30 months," said Joe Wright, president and chief executive officer, in a news release.

"While we were doing this, we also conducted an extremely large and successful bank and high-yield debt offering. In total, we raised $2.05 billion. This debt offering was oversubscribed, which demonstrated a high-level of confidence from the market in our business plan. We have also managed to deliver predictable and steady financial performance for five consecutive quarters resulting in EPS and free cash flow that were higher than even our most recent projections and Street consensus," Wright added.

The company expects that total revenues for the first quarter of 2003 will be in the range of $190 million to $200 million, EBITDA in the range of $140 million to $150 million and earnings per share in the range of 13c and 17c per share.

PanAmSat is a Wilton, Conn. provider of video, broadcasting and network services through satellites.

Cincinnati Bell Telephone Co.'s bank debt was one of the biggest advancers with the revolver bid at 91, compared to 88.833 on Monday, the delayed term loan bid at 93.5 compared to the previous day's 92 bid, and the term loan B bid at 93.286 compared to a 92.321 bid, according to data from LoanX.

This jump comes on the heels of parent-company Broadwing Inc.'s announcement that it has secured a financing commitment of $350 million notes, up from last months $200 million commitment, which was arranged by Goldman, Sachs & Co. Proceeds from these notes will be used primarily to pay down bank debt.

Furthermore, the company is currently in discussions with banks regarding an amendment to its credit facility that would change the 2004 maturity schedule. Broadwing is aiming to have the amendment closed by the end of the first quarter since it is needed in order for the company to be able to meet its 2003 liquidity requirement.

In October, Broadwing began a five-point restructuring plan that involves strengthening the company's financial position, maintaining the strength and stability of its Cincinnati Bell businesses, lowering the cash burn at its Broadwing Communications unit, continuing to review strategic alternatives and reducing the company's debt balances over time.

Cincinnati Bell is a Cincinnati provider of local and long-distance telephone access, wireless, and Internet services.

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