Tropicana cuts spreads; Riverdeep, PRC upsize; Meridian flexes up; JHT adds pricing grid

By Sara Rosenberg

New York, Dec. 18 - Tropicana Entertainment LLC lowered pricing on its opco term loan and LV Tropicana loan on Monday, Houghton Mifflin Riverdeep Group plc (Riverdeep Interactive Learning Ltd.) increased the size of its term loan B tranche and PRC LLC upsized its first- and second-lien term loan tranches.

In other primary news, Meridian Automotive Systems, Inc. increased spreads on its institutional debt and JHT Holdings Inc. added a step up in pricing to its term loan.

Tropicana Entertainment (Columbia Entertainment) went out with revised pricing on some of its bank debt on Monday morning as the transaction has been met with strong market reception, according to a market source.

With the changes, the company's $1.53 billion five-year opco senior secured term loan (Ba3/B+) has been reverse flexed to Libor plus 250 basis points from original talk at launch of Libor plus 275 bps and its $440 million 18-month senior secured loan (B2/B+) to be borrowed by LV Tropicana has been reverse flexed to Libor plus 250 bps from original talk at launch of Libor plus 300 bps, the source said.

Pricing on the company's $180 million opco senior secured revolver (Ba3/B+) was left unchanged at Libor plus 275 bps, the source added.

Last Thursday, Tropicana upsized its opco term loan to $1.53 billion from $1.49 billion and upsized its bond deal to $960 million from $925 million, with the extra proceeds being used to reduce the amount of equity used for the transaction.

Credit Suisse is the lead bank on the $2.15 billion deal that will be used to fund Columbia Entertainment's acquisition of Aztar Corp. for $54.00 per share in cash.

The $440 million 18-month senior secured loan borrowed by LV Tropicana, which will indirectly hold Aztar's 34-acre parcel situated on the Las Vegas "Strip," will have two six-month extension options. It is expected that the loan will be refinanced with permanent financing for the redevelopment of the property.

Columbia is a Fort Mitchell, Ky., owner, developer and operator of hotel properties and casinos. Aztar is a Phoenix-based gaming company.

Riverdeep increases B loan

Houghton Mifflin Riverdeep Group upsized its term loan B tranche by $50 million so as to gain incremental liquidity, according to a market source.

The seven-year term loan B is now sized at $1.62 billion, up from an original size of $1.57 billion, the source said. Pricing on the loan was left unchanged at Libor plus 275 bps.

There are more than $3.5 billion in orders for the term loan B, which made the upsizing feasible, the source added.

Houghton Mifflin Riverdeep's now $1.87 billion credit facility (Ba3/B) also includes a $250 million six-year revolver priced at Libor plus 275 bps with a 50 bps commitment fee.

Credit Suisse and Citigroup are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to fund the acquisition of Houghton Mifflin Co., a Boston-based educational publisher, from Thomas H. Lee Partners, Bain Capital Partners, The Blackstone Group and management for $3.4 billion, including the assumption of $1.61 billion in net debt.

Technically, HM Rivergroup plc, a newly formed Irish public limited company, is acquiring Houghton Mifflin, concurrently acquiring Riverdeep and then merging the two companies together.

Riverdeep, a Dublin, Ireland, provider of CD-ROM and internet-based educational products for the K-12 market, is being acquired in a share-for-share exchange valuing it at $1.2 billion, including the assumption of net debt.

HM Rivergroup expects to complete the acquisitions of Houghton Mifflin and Riverdeep before the end of 2006, subject to limited conditions, including the receipt of customary regulatory approvals.

Following closing of the transactions, HM Rivergroup will change its name to Houghton Mifflin Riverdeep Group plc.

PRC upsizes

PRC increased its total credit facility size by $22 million to $227 million through upsizings to its first- and second-lien term loans, and as a result the company has opted to do away with its $22 million of holdco notes, according to a market source.

The company's seven-year first-lien term loan B (Ba3/BB-) is now sized at $115 million, up from $105 million, and its eight-year second-lien term loan (B3/B-) is now sized at $67 million, up from $55 million, the source said.

Pricing on the two tranches was left unchanged, with the first-lien term loan B carrying a spread of Libor plus 300 bps and the second-lien term loan carrying a spread of Libor plus 650 bps.

Call premiums on the second lien are 102 in year one and 101 in year two.

PRC's credit facility also includes a $20 million six-year revolver (Ba3/BB-) and a $25 million delayed-draw capital expenditures facility (Ba3/BB-), with both of these tranches priced at Libor plus 300 bps.

RBS Securities is the lead bank on the deal that is being used to fund the already completed acquisition of the company by Diamond Castle Holdings, LLC and management.

PRC is a Plantation, Fla., provider of customer relationship management services.

Meridian ups spreads

Meridian Automotive flexed pricing higher on its term loan and synthetic letter-of-credit facility and added an original issue discount of 98 to the tranches, according to a market source.

Under the modifications, the $80 million six-year term loan and $25 million six-year synthetic letter-of-credit facility are now priced at Libor plus 600 bps, up from original talk at launch of Libor plus 550 bps, the source said.

Prior to the bank meeting, it was expected that the two institutional tranches would carry pricing of Libor plus 400 bps based on various court documents that Meridian had filed.

The institutional bank debt is non-callable for two years.

The company's $175 million exit financing credit facility also includes a $70 million five-year asset-based revolver.

Court approval of the exit facility has already been obtained and the company is hoping to emerge from bankruptcy by the end of this month.

Deutsche Bank is the lead bank on the deal.

Meridian is a Dearborn, Mich., supplier of lighting, exterior composites, console modules, instrument panels and other interior systems to automobile and truck manufacturers.

JHT adds step up

JHT Holdings added a pricing grid to its $110 million term loan, under which the spread can increase to Libor plus 375 bps from the current level of Libor plus 325 bps when leverage is greater than 4.0 times, according to a market source.

The company's $130 million credit facility (B1/B+) also includes a $20 million revolver priced at Libor plus 325 bps.

General Electric Capital Corp. is the lead bank on the deal that closed on Thursday and was used to refinance existing first- and second-lien facilities.

JHT is a Kenosha, Wis., truck and automobile transportation company.

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