FairPoint, SI, HealthCare Partners, Stewart break; American Safety sets talk; Worldspan upsizes

By Sara Rosenberg and Paul A. Harris

New York, Feb. 7 - FairPoint Communications Inc., SI International Inc., HealthCare Partners Medical Group and Stewart Enterprises Inc. all hit the secondary loan market on Monday, and all four of these deals saw their institutional paper trading in the 101 context.

Meanwhile, on the primary side of things, price talk emerged on American Safety Razor Co.'s proposed credit facility as the deal is gearing up to launch on Wednesday, Worldspan LP increased the size of its term loan after downsizing its bond offering and Valor Communications Group Inc. downsized its term loan after upsizing its bond deal.

FairPoint Communications' $590 million (of which $24 million is delayed draw) term loan B due 2012 was quoted at 101¼ bid, 101½ offered pretty steadily throughout market hours after freeing up for trading and remained at those levels by day's end, according to a trader.

The term loan B is priced with an interest rate of Libor plus 200 basis points after recently reverse flexing from Libor plus 225 basis points.

FairPoint's facility also contains a $100 million revolver due 2011 also priced at Libor plus 200 basis points after reverse flexing from Libor plus 225 basis points.

Deutsche Bank, Bank of America, Morgan Stanley and Goldman Sachs are the lead banks on the deal. Credit Suisse First Boston and Wachovia are co-managers.

The company is getting the senior secured credit facility (B1/BB-) in connection with its initial public offering of common stock.

Proceeds from the term loan and the IPO will be used to repay all $185.1 million of existing outstanding bank debt, fund tender offers and consent solicitations for notes, repurchase all series A preferred stock for $130.8 million, repay all $13.6 million of its subsidiaries' outstanding long-term debt and repay the $7 million unsecured promissory note issued in connection with a past acquisition.

The revolver, which is expected to be undrawn at closing, will be available for working capital and general corporate needs, including permitted acquisitions.

FairPoint Communications is a Charlotte, N.C., rural local-exchange carrier.

SI breaks

SI International allocated its $160 million credit facility (B1/B+) on Monday, with its term loan B seen quoted at 101 3/8 bid on the break with no offers before levels ticked up to 101½ bid, 101 7/8 offered by late day, according to a fund manager.

The $100 million six-year term loan B is priced with an interest rate of Libor plus 250 basis points with a step down to Libor plus 225 basis points if leverage falls below 21/4x. Originally, the term loan was launched with pricing of Libor plus 275 basis points but was reverse flexed with the addition of a step down last week.

As for allocations on the term loan, although they were relatively small, they were also in line with expectations being that investors knew how oversubscribed the tranche was.

"Allocations were OK. There were like 60 accounts in the book. Given that, you had to expect you would get small allocations," the fund manager said.

SI International's facility also contains a $60 million five-year revolver with an interest rate of Libor plus 250 basis points. The revolver was upsized last week from $50 million.

Wachovia is the lead bank on the deal.

Proceeds from the credit facility will be used to help fund the acquisition of Shenandoah Electronic Intelligence Inc. for $75 million in cash and refinance existing debt.

SI is a Reston, Va., provider of information technology and network solutions primarily to the federal government.

HealthCare Partners mid-101

HealthCare Partners' $135 million six-year term loan was trading around the mid-101 context on its first day in the secondary with quotes of 101¼ bid, 101 5/8 offered, according to a trader.

The institutional tranche is priced with an interest rate of Libor plus 225 basis points after coming in from original price talk of Libor plus 250 to 275 basis points.

HealthCare Partners' $145 million credit facility (B1/BB) also contains a $10 million revolver.

Bank of America and CIBC are the lead banks on the deal.

Proceeds will be used for a recapitalization.

HealthCare Partners is a Torrance, Calif., provider of health insurance and operator of medical practices and clinics.

Stewart add-on above 101

Stewart Enterprises' $130 million add-on to its term loan B (Ba3/BB) also broke for trading on Monday as the lead banks wrapped up syndication of this recently launched deal rather quickly, with the B loan quoted around 101¼ bid, 101½ offered during the session, according to a trader.

The add-on is priced with an interest rate of Libor plus 175 basis points.

Bank of America is the lead bank on the deal that will be used to help fund the company's purchase of its $300 million 10¾% senior subordinated notes due 2008.

Stewart Enterprises is a Jefferson, La., provider of funeral services.

American Safety Razor floats talk

Price talk on American Safety Razor Co.'s $312.5 million credit facility surfaced into the marketplace on Monday, with the $25 million five-year revolver (B) and $200 million seven-year first-lien term loan (B) talked at Libor plus 300 basis points and the $87.5 million 71/2-year second-lien term loan (CCC+) talked at Libor plus 675 basis points, a market source said.

The credit facility, which is scheduled to launch via a bank meeting on Wednesday, is being led by UBS Securities.

Proceeds will be used to refinance existing debt and pay a dividend.

American Safety Razor, a J.W. Childs Associates LP portfolio company, is a Verona, Va., manufacturer of personal care consumer products primarily consisting of shaving razors and blades.

Worldspan upsizes

Worldspan increased the size of its five-year term loan to $450 million from $400 million after downsizing its six-year floating-rate notes offering by $50 million to $300 million, according to a market source.

Pricing on the in-market term loan was left at Libor plus 250 basis points, the source added. The floating-rate notes priced at par to yield Libor plus 625 basis points.

Worldspan's now $490 million senior credit facility (B2/B) also contains a $40 million five-year revolver with an interest rate of Libor plus 250 basis points.

JPMorgan and UBS are joint bookrunners on the deal, with JPMorgan the left lead, and Lehman Brothers, Deutsche Bank Securities and Goldman Sachs & Co. are all agents as well.

Proceeds from the facility, along with proceeds from the notes offering, will be used to help fund the tender offer for the company's 9 5/8% senior notes, refinance existing bank debt, redeem preferred stock issued by parent company Worldspan Technologies Inc. and prepay and terminate sponsor advisory fees and dividends on Worldspan Technologies class B common stock.

Any remaining proceeds will be used for general corporate purposes.

Worldspan is an Atlanta operator of computerized reservation systems.

Valor downsizes

Valor made a second round of changes to its in-market credit facility, this time decreasing the size of its term loan B to $770 million from $890 million after increasing the size of its 10-year bond offering to $400 million from $280 million, according to a market source.

Last week, the company changed pricing on its term loan B to Libor plus 200 basis points from Libor plus 225 basis points and added a step down to Libor plus 175 basis points under certain conditions.

Bank of America and Merrill Lynch are the lead banks on the deal, with Bank of America the left lead.

Valor's now $870 million credit facility (BB-) also contains a $100 million revolver.

The Irving, Texas-based provider of telecommunications services is getting the new credit facility in connection with its proposed initial public offering of common stock.

Proceeds from the new credit facility, along with some IPO and bond proceeds, will be used to refinance existing bank debt, including repaying in full the $265 million seven-year senior secured second-lien term loan and $135 million 71/2-year senior subordinated term loan. As of Nov. 30, amounts outstanding under the second-lien loan bore interest at a weighted average annual rate of 9.93% and amounts outstanding under the senior subordinated loan bore interest at an annual rate of 12.88%.

PQ reworks B loan

PQ Corp. modified its in-market term loan B by reducing the interest rate and increasing the actual tranche size, according to a market source.

The term loan B is now sized at $335 million, up from $310 million, and pricing is now set at Libor plus 200 basis points, down from price original talk of Libor plus 250 basis points, the source said.

Toward the end of last week, the company priced an eight-year senior subordinated note offering that was downsized to $275 million from $300 million at par to yield 7½%. The $25 million taken out of the bond offering was the extra funds shifted into the term loan B.

PQ's $410 million credit facility (B1/B+) also contains a $100 million revolver that was said to be left unchanged in terms or pricing at Libor plus 250 basis points, the source added.

JPMorgan and UBS are the lead banks on the credit facility, with JPMorgan the left lead.

Proceeds from the loan and the bonds will be used to help fund JPMorgan Partners' leveraged buyout of PQ, a Berwyn, Pa.-based chemicals and engineered glass materials company.

Rayovac closes

Rayovac Corp. closed on its new $1.03 billion credit facility (B1/B+) consisting of a $540 million U.S. term loan B and a Canadian dollar term loan B tranche in the equivalent of $50 million with an interest rate of Libor plus 200 basis points and a step down to Libor plus 175 basis points on ratings of Ba3/BB-, a euro term loan B tranche in the equivalent of $140 million at Libor plus 250 basis points (with no grid) and a $300 million revolver at Libor plus 225 basis points.

During syndication the U.S. term loan B was downsized from $740 million after the company's bond offering was upsized by $200 million to $700 million, the U.S. term loan B was reverse flexed from Libor plus 225 to 250 basis points price talk, the euro term loan B was reverse flexed from Libor plus 275 basis points and the Canadian term loan B was reverse flexed from Libor plus 225 to 250 basis points price talk.

Proceeds from the credit facility, along with proceeds from the bonds, were used to help fund the now completed acquisition of United Industries Corp. for a total value of about $1.2 billion including the assumption of about $880 million of United Industries debt.

In addition to helping fund the acquisition, proceeds from the facility were used to refinance Rayovac's existing credit facility.

Bank of America, Citigroup and Merrill Lynch were the lead banks on the credit facility, with Bank of America the left lead.

Rayovac is an Atlanta-based consumer products company and one of the largest battery, shaving and grooming, and lighting companies. United Industries is a St. Louis-based manufacturer and marketer of consumer products for lawn and garden care and household insect control.

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