Warner seeing skepticism; Chemtura, Carmike tweak deals; IMS, U.S. TelePacific ready launches

By Sara Rosenberg

New York, Jan. 25 - Warner Chilcott plc's amendment proposal that would reduce pricing and the Libor floor on term loan borrowings is anticipated by some to fall short on lender consents at the current terms when the deadline for signatures hits on Tuesday.

In other news, Chemtura Corp. and Carmike Cinemas Inc. both reverse-flexed pricing on their credit facilities and lowered the original issue discounts as a result of strong market demand.

In addition, IMS Health Inc. came out with timing on its multi-billion credit facility, with the deal scheduled to be presented to European investors towards the end of this month and to U.S. investors early next month.

Also, U.S. TelePacific announced plans to bring a refinancing credit facility to market later this week, and Cedar Fair LP's credit facility was heard to be attracting plenty of attention before the books closed on Monday.

Warner Chilcott may fail

Market chatter is that there is "no way" that Warner Chilcott's amendment/repricing proposal will pass at its current terms, although, being that lenders have until Tuesday to throw in their consents, nothing definitive is out, according to a buyside source.

Under the amendment, pricing on the term loan B-1 and B-2, and additional term loans, would be reduced to Libor plus 325 basis points from Libor plus 350 bps.

And, the Libor floor under the term loan A, term loan B-1, term loan B-2 and additional term loans would be lowered to 1.75% from 2.25%.

There would be no changes made to the revolving credit facility.

Lenders are not being offered a consent fee for the amendment, which was first announced last Wednesday.

At first, lenders were only being given two days to consent to the amendment, but that deadline was later extended.

Warner Chilcott needs majority

In order for the amendment/repricing to go through, Warner Chilcott needs majority consent from its bank loan lenders.

In connection with the amendment, the company told investors that existing term loan lenders that do not consent to the amendment will be refinanced at par plus accrued interest with the proceeds of new money replacement term loans.

Existing term loan A lenders that consent to the amendment will exchange their loans for replacement term A loans on the effective date, existing B-1 lenders that consent will get replacement B-1 loans and existing B-2 lenders that consent will get replacement B-2 loan.

The replacement term loan B-1 and term loan B-2 will trade as a strip.

Credit Suisse is the administrative agent, but Bank of America is the left lead on the deal.

Warner Chilcott holds firm

Warner Chilcott's strip of term loan B-1 and B-2 debt held steady on Monday even with the consent deadline fast approaching, according to a trader.

The strip of debt was quoted at par bid, par 3/8 offered, unchanged from Friday's levels, the trader said, adding that it has pretty much been in that context since the amendment was announced.

Prior to the amendment announcement, the strip was being quoted in the par ½ bid, 101 offered area.

Warner Chilcott is a Rockaway, N.J.-based specialty pharmaceutical company.

Chemtura cuts pricing

On the new deal front, Chemtura reduced pricing on its $450 million debtor-in-possession financing credit facility and tightened the original issue discount on the term loan, according to a market source.

The $150 million revolver and the $300 million term loan are now priced at Libor plus 400 bps, down from initial talk of Libor plus 425 bps, with the 2% Libor floor left unchanged, the source said.

And, the original issue discount on the term loan was reduced to 99½ from 99, the source continued.

Citigroup is the lead bank on the deal.

Chemtura is a Middlebury, Conn.-based manufacturer and seller of specialty chemicals and polymer products.

Carmike revises pricing

Like Chemtura, Carmike Cinemas lowered pricing on its $305 million credit facility (B1/B-) and trimmed the original issue discount on its term loan B, according to an informed source.

Both the $275 million term loan B and the $30 million revolver due January 2013 are now priced at Libor plus 350 bps, down from initial talk of Libor plus 400 bps, while the 2% Libor floor was left unchanged, the source said.

And, the original issue discount on the term loan B was reduced to 99 from 981/2, the source added.

Lenders were given till Monday evening to recommit to the deal.

Carmike lead banks

JPMorgan, Citigroup and Macquarie Capital are the joint lead arrangers and joint bookrunners on Carmike Cinemas' credit facility.

Proceeds from the new deal will be used to refinance existing bank debt.

The existing term loan that is being replaced had a balance of $250.8 million outstanding at Dec. 31 and matures in May 2012, while the existing revolver is sized at $50 million and matures in May 2010.

Closing on the transaction is expected by late January/early February.

Carmike Cinemas is a Columbus, Ga.-based digital cinema and 3D motion picture exhibitor.

IMS reveals timing

IMS Health released timing on its proposed $2.275 billion senior secured credit facility with a bank meeting set for Jan. 28 in London and another one set for Feb. 4 in New York, market sources told Prospect News on Monday.

Tranching on the deal is comprised of a $2 billion term loan and a $275 million revolver.

Goldman Sachs is the lead bank on the deal and provided the initial commitment later. However, later on, the letter was amended to add commitments from Bank of America, Barclays, HSBC and RBC of $250 million each towards the term loan and $50 million each towards the revolver.

Proceeds will be used to help fund the buyout of the company by TPG Capital and the CPP Investment Board.

Under the acquisition agreement, IMS shareholders will receive $22 in cash per share of common stock. The transaction has a total value of $5.2 billion, including the assumption of debt.

IMS getting equity, notes

IMS Health also expects to get $2.793 billion in financing to help fund its buyout and $1 billion of senior unsecured notes.

The notes are backed by a commitment for a $1 billion senior unsecured term loan.

According to sources, these notes will not be sold in the high-yield market since Goldman Sach's mezzanine fund has decided to invest in them.

Completion of the buyout is expected to occur by the end of the first quarter of 2010, subject to approval of IMS shareholders, regulatory approvals and customary closing conditions.

A shareholder meeting to vote on the buyout is set to take place on Feb. 8.

IMS is a Norwalk, Conn.-based provider of market intelligence to the pharmaceutical and health care industries.

U.S. TelePacific plans new deal

U.S. TelePacific revealed that it will approach lenders with a new $385 million credit facility that will be used to refinance existing debt, according to a market source.

A bank meeting to kick off syndication on the loan is scheduled to take place on Wednesday.

Credit Suisse, Deutsche Bank and Bank of America are the lead banks on the deal that consists of a $25 million revolver and a $360 million term loan, the source said.

U.S. TelePacific is a Los Angeles-based competitive local exchange carrier.

Cedar Fair nets interest

Syndication of Cedar Fair's $1.25 billion senior secured credit facility (Ba3/BB) was said to be doing just fine as the book was getting ready to close on Monday, according to a buyside source.

The facility consists of a $250 million five-year revolver and a $1 billion six-year term loan B, with both tranches talked at Libor plus 375 bps with a 1.5% Libor floor.

Initially, the company was planning on doing an amend and extend with an incremental loan but it then changed to a whole new deal with new documentation and new debt tranches since market conditions are favorable.

Under the original proposal, the company was asking to extend its existing $250 million revolver and non-extended term loan debt to 2014 from 2012 with pricing of Libor plus 400 bps with no Libor floor. The amended term loan would have been sized at $1 billion, including $100 million of incremental debt.

Cedar Fair OID

New lenders to Cedar Fair's term loan B are being offered the paper at an original issue discount of 991/2, and lenders who extended their term loan B commitments during the company's previous amend and extend transaction are getting 50 bps for rolling over their commitments and waiving the 101 call protection.

Bank of America, JPMorgan, Barclays Capital, UBS and KeyBanc Capital Markets are the lead banks on the deal.

Despite creating a new credit facility, Cedar Fair still has to amend its existing credit facility to allow for the change of control resulting from Apollo Global Management's purchase of the company.

Lenders are being offered a 5 bps amendment fee for the change of control, as opposed to the 12.5 bps fee that was being offered under the original deal.

Cedar Fair plans bonds

In addition to the new credit facility, financing for the buyout of Cedar Fair is expected to come from the sale of $700 million of high-yield bonds and up to $765 million in equity.

Under the acquisition agreement, Cedar Fair unitholders will receive $11.50 in cash for each limited partnership unit that they hold. The transaction is valued at about $2.4 billion, including the refinancing of outstanding debt.

Closing is expected by the beginning of the second quarter of 2010, subject to approval of holders of two-thirds of Cedar Fair's outstanding units, the receipt of regulatory approvals and other conditions.

Cedar Fair is a Sandusky, Ohio-based amusement-resort operator.

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